Greenspan: Fannie and Freddie are carrying too much debt
It seems like it should have been obvious that these kinds of trouble were going to appear:
Greenspan says that Fannie Mae and Freddie Mac have expanded the portfolio of loans their financing too far ($4 trillion) -- so far that the risks could not be adequately hedged in the event of a financial crisis. They've been able to do this because, as government sponsored entities, they've been give better terms because many believe the government would bail them out in the case of trouble. However, this has never been stated and may not be true.
It seems like this might start mortgage rates heading north -- that money that seemed so easy to make on mortgage refinancing may not turn out to be so easily made.
Posted by dapkus at February 25, 2004 01:05 AM
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