According to an article in MSN’s Bottom Line tells people of what was found by an investigation of ProPublica and NPR into Freddie Mac. This investigation discovered that Freddie Mac has invested in financial instruments that profit when homeowners are stuck in high-interest mortgages.
What makes this such terrible news is that Freddie Mac is supposed to be the ones dedicated to backstopping mortgages, they are supposed to be making it easier for people to be getting home loans. When the government bailed the troubled company out in 2010, one of the requirements was that they get rid of all of their riskier investments. They apparently didn’t do that, however, and have doubled down on securities when homeowners lose.
To make matters even worse, Freddie Mac has been making it harder for homeowners to get credit and has even been raising fees for refinancing. It’s getting so bad that the Federal Reserve has said about the fees for both Freddie Mac and sister company Fannie Mae, “difficult to justify.”
When homeowners lose, when they can’t get refinanced to lower rates, it damages the economy. According to the research company Corelogic, there are around 11 million homes underwater just last year. If there is one person who is benefiting greatly from that number, it’s definitely not the homeowners, but it just so happens that the head of the trading division at Freddie Mac, Peter Federico, is. In 2010 he was paid 2.5 million and in 2011, he’s up to make even more.
With news like this so prevalent in the news cycle, it’s a scary thought to be a first time home owner in this market. Luckily, Approved Loan Store is here to make sure that you can get the just the right loan. There are a variety of options, such as 30 or 15 year fixed mortgages, adjustable rate mortgages, etc. The staff is always ready to answer any questions and do what they can to help you. You can find out more information on getting a home loan here. Don’t forget to like on Facebook to stay up to date on news and offers.