David
Joined: 19 May 2004
Posts: 754
Location: Atlanta, GA
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| Posted: Sat Feb 19, 2005 7:56 pm Post subject: Greenspan Suggests Limits on Mortgage Portfolios |
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Quote: "If they continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate-risk aversion, they potentially create ever growing potential systemic risks down the road," Greenspan said.
Fannie Mae and Freddie Mac pump money into the home mortgage market by buying and guaranteeing repayment of billions of dollars of home loans each year from banks and other lenders. The companies then bundle the loans into securities that are resold to investors. The companies' stock and debt are held by investors around the world.
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