Is Freddie Mac trying to help homeowners-or hurt them?
A recent investigation into trades made by the taxpayer-owned mortgage giant shows that while Freddie with one hand is helping consumers get mortgages, it is, with its other, making those mortgages harder to refinance. Result: Homeowners trying to refinance their way out of high-interest mortgages say they feel trapped in "financial jail."
The investigation-a joint effort between National Public Radio and ProPublica, an independent, non-profit investigative news service-looked at multibillion-dollar investments made late in 2010 by Freddie. These investments pay off only if homeowners remain locked in high-interest mortgages.
Not only do the investments appear to be at odds with Freddie's public mandate, they increase the size of Freddie's investment portfolio at a time when the Freddie, under the terms of a 2008 bailout agreement, is supposed to be reducing it. Both Freddie Mac and Fannie Mae were bailed out by U.S. taxpayers in 2008 and are now owned by the public.
I guess my post title should actually read, "Taxpayers screwing homeowners".
Please, someone explain this to me. I'm told that I just simply do not understand how finance works. The Fed is doing everything they can to crush the dollar (so said in the interest of keeping interest rates low) so the housing market and others can improve but here is Freddie Mac betting against that very thing and working against it.
I guess I really don't understand.
Is Freddie Mac Betting Against Homeowners? - Yahoo! News