Freddie began increasing these bets dramatically in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages.
No evidence has emerged that these decisions were coordinated. The company is a key gatekeeper for home loans but says its traders are “walled off” from the officials who have restricted homeowners from taking advantage of historically low interest rates by imposing higher fees and new rules.
Freddie’s charter calls for the company to make home loans more accessible. Its chief executive, Charles Haldeman Jr., recently told Congress that his company is “helping financially strapped families reduce their mortgage costs through refinancing their mortgages.”
But the trades, uncovered for the first time in an investigation by ProPublica and NPR, give Freddie a powerful incentive to do the opposite, highlighting a conflict of interest at the heart of the company. In addition to being an instrument of government policy dedicated to making home loans more accessible, Freddie also has giant investment portfolios and could lose substantial amounts of money if too many borrowers refinance.
3 comments:
Rates are supposed to stay low until 2014.
But this is only going to help those who have equity in their home. Many people had equity but when things tanked they were underwater on their mortgage.
Its a bad situation. There are homes by me that were foreclosed on the mortgage on one was 210K, the current value 157K. And it was sold by the bank for 65K? Now couldn't they work with the homeowner who bought the house for 257K?
By the way Callista is even scarier than Laura Bush.
But the good news is the higher Gingrinch does, the better the chances of Obama getting re-elected.
The GOP preaches they are the moral right. Here we had McCain last election, with his drug addict wife (mistress) he was playing around with while his wife was recovering from a horrific car accident.
Now we have Gingrinch who had mistresses while wife number one, and also while wife number was ill.
Is this the new face of the GOP? Have a mistress, but all while your wife is ill.
Good to hear from you, Third. The GOP Presidential race has become the Republican clown car. Newtie and Willard will duke it out for the bone in Florida. They are the joke of the GOP race.
Yeah, a lot of foreclosure happen. Glad that the new RMBS Working Group was created by President Obama.
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