Mortgage assistance plan foreseen as backup

Mortgage News > Mortgage assistance plan foreseen as backup

Date: 07/15/2008

The assistance program put together by the Federal Reserve this past weekend is intended to serve as backup if needed. Henry Paulson, Treasury Secretary, said "the Bush administration has no immediate plans to extend emergency loans to mortgage giants Freddie Mae and Freddie Mac or to purchase the stock of the two companies "under terms and conditions that protect the U.S. taxpayers"

In Paulson's remarks, he attempted to reassure lawmakers that the proposed "rescue" will not put taxpayers at unnecessary risk. The assistance plan is necessary to help the nation's housing market, which has most certainly seen brighter days, to get back on its feet and alleviate the concerns of financial investors that are concerned with the increasing rate of bad mortgages.

Paulson attempted to secure the backing of Congress by saying "Our plan is aimed at supporting the stability of financial markets, not just these two enterprises," referring to Freddie Mac and Fannie Mae, "This is consistent with Treasury's mission to promote the market stability, orderliness and liquidity necessary to support our economy."

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