Are Fannie and Freddie getting a break on all of the bad loans they are responsible for? They could be getting forgiving for the billions dollars in bad loans.
These poorly regulated mortgages were a big cause of the numbers of mortgage defaults that helped cause the housing crash. A Freddie Mac spokesperson stated that part of the reason for the buy backs is that tax payer dollars should not be paid out to cover these loans which should never have been made in the first place.
Soured loans from both the residential and commercial markets have been the main contributor to the demise of these banks; however, the global financial crisis has also been taking its toll on the beleaguered institutions as the stock market sees sharp declines and investor confidence continues to fall. While some of the bank's woes have been alleviated by federal stimulus packages, the continued economic situation is proving to be a road block for the generation of new capital.
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