A Home Equity Line of Credit From Congress?
Posted on 23 July 2008 by Jamie Beck
Government sponsored enterprises Fannie Mae and Freddie Mac may no longer be in trouble, thanks to a generous resolution passed by the House. The new bill gives these organizations access to an unlimited amount of money, which can be used to purchase mortgages from struggling lenders.
Not everyone appreciates today’s decision. A Seeking Alpha blogger compares it to receiving a HELOC from the government:
“The bailout plan for mortgage-struck Freddie and Fannie includes something awfully similar to the sort of home equity line of credit [HELOC] nuttiness that got the mortgage market in trouble in the first place.”
Will tax payers appreciate this move to counter the lending crisis? Or will they resent national funding being used to bail out bad loans?
The Senate is expected to also approve bill, which should make its way to the president’s desk as early as this weekend.
See Also:
FDIC Freezes All IndyMac Home Equity Lines
Tags | Fannie Mae, Freddie Mac, Heloc, home equity line of credit