STOCK MARKET WATCH -- Thursday, 1 March 2012

[Demeter]

50. FHFA releases plan for Freddie, Fannie exit A MUST READ

http://www.washingtonpost.com/business/economy/fhfa-releases-plan-for-freddie-fannie-exit/2012/02/21/gIQAO8NTRR_story.html

A federal housing regulator on Tuesday released a plan for beginning to scale back mortgage giants Fannie Mae and Freddie Mac — just as the Obama administration is pressing the taxpayer-backed companies to do more to help homeowners.

The Federal Housing Finance Agency, which oversees Fannie and Freddie, laid out steps to wind down the companies, largely by increasing fees charged to borrowers who take out mortgages. The FHFA’s hope is that as the cost of receiving a taxpayer-backed mortgage goes up, more borrowers will turn to private lenders, whose loans do not carry government backing.

But the effort could conflict with measures being pursued by Fannie and Freddie — and the Obama administration — to increase the government’s role in housing.

A year ago, the administration released a white paper calling for a gradual wind-down of Fannie and Freddie, whose bad bets on risky home loans before the financial crisis have cost taxpayers more than $130 billion. But for much of the past year, the White House has been going in the opposite direction. Administration officials have been urging Fannie and Freddie to take steps to help homeowners in an effort to lift home values, free up cash in the economy and help borrowers avoid foreclosure...MORE

THIS IS WHERE OBAMA HAS DECIDED TO DRAW THE LINE, IT SEEMS...WE SHALL SEE IF IT IS A FIRM LINE, OR A SHAKY ONE..IF HE THINKS THIS WILL GET HIM RE-ELECTED, HE'S 3 YEARS TOO LATE...