The Chairman for the US Federal Reserve spoke with Congress on 07/16/2008, and stated that the mortgage giants Freddie Mac & Fannie Mac are in ‘no danger of failing’. The US Treasury Department & the FED came to their rescue on Sunday. They will be offering help towards their finances to help alleviate any issues that FNMA/FHLMC maybe experiencing.
The two mortgage giants hold over $5 trillion in home loans. The Bush Administration is asking US Congress to provide temporarily increases to the FNMA/FHLMC’s lines of credit. The two mortgage corporations are “adequately capitalized,” Bernanke said. However, “weakness of market confidence is having an effect” on these mortgagte corporations, making it extremely hard to find investors.
