Fannie and Freddie Shell Out Exec. Bonuses As Fed Pumps More Money Into Failed Mortgage Giants

Fannie and Freddie announced today that like AIG, it will award retention bonuses to some execs.

Will these mortgage giants receive the same "peasants with pitchforks" backlash as AIG?

Somehow I doubt it. Congressmen like Chris Dodd and Barney Frank are ultimately responsible for the failures of Fannie and Freddie.

Stocks rallied today as The Fed announced it's injecting $1 Trillion into the housing market.

Specifically, it will buy more mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac. The central bank will buy an additional $750 billion, bringing its total purchases of these securities to $1.25 trillion. It also will boost its purchase of Fannie and Freddie debt to $200 billion.

WASHINGTON (AP) -- The Federal Reserve announced Wednesday that it will inject about $1 trillion into the economy in a bold effort to help the battered housing market and lift the country out of recession.

At the same time, the Fed left a key short-term bank lending rate at a record low of between zero and 0.25 percent. Economists predict the Fed will hold the rate in that zone for the rest of this year and for most -- if not all -- of next year.

In a new program, the Fed said it will buy up to $300 billion of long-term bonds, a move that should boost Treasury prices and drive down their rates.

That would ripple through and lower rates on other kinds of debt. The last time the Fed set out to influence long-term interest rates was during the 1960s.

And expanding an existing program, the Fed said it will buy more mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac. The central bank will buy an additional $750 billion, bringing its total purchases of these securities to $1.25 trillion. It also will boost its purchase of Fannie and Freddie debt to $200 billion.

"This is not only going to keep mortgage rates low for a long period of time," said Greg McBride, a senior financial analyst at Bankrate.com. "The mere announcement may produce a honeymoon effect and bring mortgage rates down to even lower levels in the coming days."

Fannie Mae Will Loosen Rules; Drop Credit-Score Requirements Deja Vu All Over Again

Isn't this what helped create this mess in the first place?





Bloomberg reported:

Feb. 5 (Bloomberg) -- Fannie Mae, the mortgage-finance company under U.S. government control, will loosen rules for homeowners seeking to lower their loan payments by refinancing.


Fannie Mae will drop some credit-score requirements, reduce income-documentation standards and waive the need for appraisals in some cases, according to a notice yesterday to lenders posted on the Washington-based company’s Web site. The changes apply to loans that the company owns or guarantees.

(Hat tip forwhatitsworth/gatewaypundit)