Here’s a blockbuster. Fasten your seatbelts.
“The Treasury announced Dec. 24 that the two mortgage- finance companies, which were seized by the U.S. almost 16 months ago, could tap an unlimited amount of capital for three years, up from as much as $200 billion each.”
That’s right. On Christmas Eve, while everyone else in America was busy thinking about anything but insolvent GFEs, Fannie and Freddie both got blank checks.
It gets better.
“Given this outlook, we believe that the main driver of this significant change is the flexibility it gives the government to take more aggressive action to support the housing market, including potentially going down the road of allowing some form of principal writedown,” the analysts wrote.”
That’s right. Principal loan forgiveness is on the table. So begins the next phase of this journey. Does anyone want to opine as to where it leads?
The full article–
http://www.bloomberg.com/apps/news?pid=20601087&sid=aeXf1lYN2HgY&pos=6
