Subscribe to the BlogOver 80% of the US mortgage loans are provided by Fannie Mae and Freddie Mac, which are in deep trouble since the housing crisis began in early 2008. These two companies have lost over 200 billion dollars in the last two years alone, and since the beginning of 2008 they are running only on the lavish support funding by the US government.
Now with the major repayments of the TARP funds by the banking sector, the US government has decided to provide unlimited financial aid to these two mortgage companies. And this decision is expected to provide a major fillip to these two companies in providing more financial support to the ailing housing sector.
That in turn can turn around the entire US economy, so believes the US government.