The problems with Fannie Mae and Freddie Mac are further complicating issues with the pending housing bill. Here is an excerpt from a recent AP article on the subject:
The push to shore up Fannie Mae and Freddie Mac is adding momentum to the housing package, which creates a new regulator and tighter controls over the companies and creates a new affordable housing fund financed by their profits.
The bill creates a $300 billion program at the Federal Housing Administration to let strapped homeowners who can’t afford their monthly payments — many of them trapped in subprime loans and owing more than their homes are worth — refinance into cheaper, fixed rate mortgages instead of losing their homes.
In something of an ironic twist, Senate Republicans who initially complained the FHA program would be a taxpayer-financed bailout backed it after Democrats agreed to cover any losses by diverting the affordable housing fund. Now lawmakers are contemplating bailing out the rescuers.
The plots twists are adding up on this saga…