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Report Highlights Fannie, Freddie Risks
Monday April 14, 12:36 PM EDT
WASHINGTON (AP) — A deep recession could force mortgage-finance titans Fannie Mae and Freddie Mac to require a federal bailout large enough to hurt the U.S. government's top-grade credit rating, Standard & Poor's warned Monday.
A lower credit rating would mean higher borrowing costs for the U.S. government and could lead to a flight from Treasury securities, which investors — including foreign governments — consider to be virtually risk-free.
The financial stress Fannie and Freddie face poses a far larger risk to the government than the $29 billion in mortgage assets taken on by the Federal Reserve to avoid the bankruptcy of investment bank Bear Stearns Cos, the credit rating agency said.
Still, S&P analysts see a bailout of Fannie and Freddie as unlikely and point out that U.S. officials "are focused on avoiding a deep and prolonged recession."
Report Highlights Fannie,Freddie Risks
Yeah and just about a quarter ago everything was rosy too.
Monday April 14, 12:36 PM EDT
WASHINGTON (AP) — A deep recession could force mortgage-finance titans Fannie Mae and Freddie Mac to require a federal bailout large enough to hurt the U.S. government's top-grade credit rating, Standard & Poor's warned Monday.
A lower credit rating would mean higher borrowing costs for the U.S. government and could lead to a flight from Treasury securities, which investors — including foreign governments — consider to be virtually risk-free.
The financial stress Fannie and Freddie face poses a far larger risk to the government than the $29 billion in mortgage assets taken on by the Federal Reserve to avoid the bankruptcy of investment bank Bear Stearns Cos, the credit rating agency said.
Still, S&P analysts see a bailout of Fannie and Freddie as unlikely and point out that U.S. officials "are focused on avoiding a deep and prolonged recession."
Report Highlights Fannie,Freddie Risks
Yeah and just about a quarter ago everything was rosy too.
