Say Goodbye to Fannie and Freddie

8/14/2010

THE Federal National Mortgage Association — known as Fannie Mae — and the Federal Home Loan Mortgage Corporation — Freddie Mac — were poorly structured from the time, 40 years ago, when they were set up as so-called government-sponsored enterprises. Both of these technically private companies, designed to foster the issuance of home mortgages, enjoyed implicit federal backing in the event they got into financial trouble but only weak regulation to prevent such trouble. Essentially, the federal government insured the companies’ liabilities but never charged a premium.

LONDON—A fresh warning from the European Central Bank and an unexpected fall in euro-zone industry output in June contributed to concerns that Europe's economic recovery was losing momentum. Industrial production in the 16 countries that share the euro fell in June on declines in output in France and Germany, data from the European Union's Eurostat statistics office showed Thursday.Policy makers and economists expect the recovery to lose some steam in the second half of 2010 as stimulus measures run their course and governments cut spending to reduce their budget deficits.

PHOENIX — During the great housing boom, homeowners nationwide borrowed a trillion dollars from banks, using the soaring value of their houses as security. Now the money has been spent and struggling borrowers are unable or unwilling to pay it back. The delinquency rate on home equity loans is higher than all other types of consumer loans, including auto loans, boat loans, personal loans and even bank cards like Visa and MasterCard, according to the American Bankers Association.

Educated investors know that past investment returns are not necessarily the best predictors of future results. It’s mutual fund and other expenses that really matter. Morningstar, in an act of radical and admirable transparency, recently put that assertion to the test and found that expenses actually helped investors make better decisions than its own vaunted star-rating system.

Stack of Stuff:

The Ghosts of Lapsed Stimuli

Say Goodbye to Fannie and Freddie

ECB Warning, Data Add to Recovery Concerns

Fund Expenses More Important Than 5-Star Status

Unemployed Homeowners to Get $3 Billion in Aid

Californians' income falls for first time since WWII

Feds rethink policies that encourage home ownership

Federal workers earning double their private counterparts

Debts Rise, and Go Unpaid, as Bust Erodes Home Equity

Foreclosure Crisis Spreads Across U.S. as Idaho Defaults Mount

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