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  • Fannie and Freddie - Some Facts to Keep in Mind [View article]
    Re: Rawberts comment - MBIA and AMBAC are part of the problem. Since F&F as part of the mortgages can only deal with prime mortgages with less than 70% loan (30% principal) it depends on the insurers to gaurantee mortgages with higher loan amounts i.e. the insurers like MBIA would have to gaurantee 20% of a 90% mortgage. Since the insurers have been downgraded, such mortgages (in CDO') held by F&F and other entities are also been down graded.

    If the housing market recovers and actual losses don't materialize then all will be OK and the mark to market losses will be reversed. If housing market continues to go south and losses materialize then all these entities will go to hell in a hand basket -- esp the monolines like Ambac and MBIA.
    Jul 13 18:47 pm |Rating: 0 0
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