News

• Fannie Mae and Freddie Mac are the two largest mortgage buyers in the country. They were created by Congress in 1970 to buy mortgages from lending institutions and then either hold them in investment portfolios or resell them as mortgage-backed securities to investors. The Federal Reserve and the Treasury Department have announced actions to stabilize Fannie Mae and Freddie Mac whose capital levels remain strong despite a drop in their stock prices. The announcement was intended to reassure the capital markets of the viability of the two entities and their ability to provide ongoing liquidity to the mortgage market.  Reports indicate it has had a stabilizing effect and to date the turmoil does not appear to have significantly impacted the Iowa mortgage market as rate locks are being honored and loans are being made.      
• Congress has passed comprehensive housing legislation that combines regulatory reform of Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The legislation also provides $300 billion in new lending authority to refinance troubled mortgages into long-term, fixed rate loans.

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