This weekend will be interesting... it is really hitting the fan with Freddie and Fannie for the real estate market. But the bottom line is "this will pass". Not today, not tomorrow, but this will pass....
While most of the mortgages they hold are fixed-rate loans to borrowers with good credit, the housing downturn has been so severe that they have sustained gigantic losses in their loan portfolios due to foreclosures — about $11 billion over the past few months — pushing them closer to the financial brink.
And because their stock prices have plunged so far, they are hard pressed to raise fresh capital on their own.
Former St. Louis Fed President William Poole this week said Fannie and Freddie were already technically insolvent.
"There's no good news here for the housing market or for the broader economy," said Mark Zandi, chief economist at Moody's Economy.com.
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clipped from news.yahoo.com
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