Summary
Though unprecedented real estate growth in recent years tremendously benefited the economy in most states, the mortgage market is at considerable risk. Currently, Congress is exploring how to "fix" the residential loan crisis. Congressional proposals tend to focus on solving borrower defaults without addressing the root of the problem - irresponsible mortgage loan origination.
In his pending House bill, Rep. Barney Frank, Massachusetts Democrat, aims to adjust some problems in lending practices with targeted spending to address the crisis. His proposed bill will "temporarily increase the portfolio caps applicable to Freddie Mac and Fannie Mae, to provide the necessary financing to curb foreclosures by facilitating the refinancing of at-risk sub-prime borrowers into safe, affordable loans. .."See the full content of this document
Extract
Fixing the Mortgage Crisis
Despite these good intentions, increasing funding without a means to address how those funds will be backed in the event of foreclosure is an
inadequate response Related issues include Fannie Mae limits and the potential costs associated with unaffordable loans, or even...See the full content of this document
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