New Lease on Life For Mortgage Giant

Fannie Mae and Freddie Mac, the mortgage giants that hold more than 40% of the $8 trillion mortgage market in the US, was in trouble due to accounting failures found by regulators. The head of the Oversight department at the company says that if the accounting had continued for a few more years, the two companies could have folded, potentially “shutting down” the nation’s housing market until other arrangements could be made for the hundreds of millions of dollars in mortgage debt.

The officer points out that the lenders are not out of the financial woods yet, but says that in a few years the two companies should be back to running smoothly. The government-sponsored lenders were ordered to enact corrections laid out by regulators and Congress has created a Bill to tighten control of the governments lending duo. The holdings of the company may also be reduced, since Fannie Mae is the second largest borrower; the US government is the first largest.