Tuesday, September 23, 2008

Fannie & Freddie to Stabilize Market Through Purchase of More Mortgage-Backed Securities

James Lockhart, director of the Federal Housing Finance Agency (FHFA), issued a statement on Friday, September 19, which supported Treasury Secretary Paulson’s timely and bipartisan plan to mitigate the effects of bad mortgages on the nation’s financial market.

Lockhart’s statement highlights the most notable portion of the Treasury’s program, which calls for Fannie Mae and Freddie Mac to provide additional funding to mortgage markets by purchasing more mortgage-backed securities. As the conservator of these two entities, the FHFA has instructed both companies to move forward with this plan immediately.

Regarding the long-term purpose of this plan, Lockhart said:

“The overall goal of the program will be to contribute greater stability and liquidity in the mortgage market, which should enhance consumers’ access to mortgage financing and ultimately result in reduced mortgage interest rates relative to the current situation.”

For more information about this statement or the Federal Housing Finance Agency, please visit the Office of Federal Housing Enterprise Oversight’s Web site.

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