Fixing Of Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA), Freddie Mac (FMCC) Unlikely In 2015

It is unlikely that the U.S. Senate will tackle the housing finance issues that also touch on the mortgage companies Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Federal Home Loan Mortgage Corp (OTCBB:FMCC). Richard Shelby, who heads the Senate Banking Committee, said that it is better to retain the current arrangement of FNMA, also known as Fannie Mae and FMCC, also known as Freddie Mac, than creating a housing finance system that is worst. However, Shelby will be looking into other options as the Senate tries to reform the U.S. housing finance structure.

Shelby is opposed to a new mortgage finance system that puts the government at the center of guaranteeing mortgages. There have been efforts to come up with such a system, but Shelby doesn’t see it work. That is why he said recently at conference by the U.S. Chamber of Commerce that instead of replacing Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac with a system that won’t work they better leave the institutions as they are.

Given Shelby’s comments, it is likely that the two mortgage-finance giants would remain under the control of the federal government for the next two years. A bill in the Senate, which Shelby opposed, sought to create a housing finance system where the government would take the responsibility of guaranteeing mortgage loans. The bill failed to get the full support of the Senate, which now leave Shelby to come up with a better alternative.

Unfinished business

The issue of Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac is the largest business issue that remains unfinished from the government’s action at the height of the financial crisis. Both Fannie Mae and Freddie Mac received billions of dollars in government bailout to stay afloat amid the financial meltdown. The mortgage giants have since repaid all their bailout loans, but the company continues to sweep all their profits.

More funding

In the recent times, there have been concerns that Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac could be forced to seek further government funding amid rising risks and shrinking reserves.

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