Fannie, Freddie to Hand Mortgage Securitization to New Firm

Fannie Mae and Freddie Mac will form a joint venture for securitizing home loans that could end up replacing the two government-controlled mortgage finance giants. Fannie Mae and Freddie Mac, which help finance about two-thirds of new U.S. homes loans, were seized by the government in 2008 as mortgage losses mounted. They have drawn nearly $190 billion from the U.S. Treasury to stay afloat. Democrats and Republicans on Capitol Hill agree that Fannie Mae and Freddie Mac should eventually be wound down, but have failed to find common ground on what should replace them. DeMarco’s plan provides an interim structure for some of their business, but the ultimate decision remains in Congress’ hands. To read more….