WASHINGTON -- Fears that the woes of the housing industry are not over were triggered Monday when shares of Fannie Mae and Freddie Mac fell to their lowest levels in 14 years.
If the companies have trouble raising capital, it could impact their ability to purchase mortgages from credit unions and other financial institutions. This could cause the housing loans to increase and depress an already troubled market.
The two companies, which have lost more than $11 billion in the nine months ending March 31, own or guarantee $5.2 trillion worth of home mortgages, about half of all outstanding loans.
The Housing legislation currently pending in Congress would create stronger regulatory oversight over both companies.
If Fannie and Freddie were to default on their obligations, a government bailout could be required.
Fannie Mae's shares were down 16% at $15.74 at yesterday's close of the New York Stock Exchange. Freddie's shares were down 17.9% at $11.91 yesterday.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
