Obama Administration Removes Mortgage Ceiling on Fannie, Freddie
The Obama administration has removed the mortgage ceiling or the credit line cap on Fannie Mae and Freddie Mac to give the two mortgage firms more financial help for the next three years.
The government said that the removal of the credit line would give the firms strength to support the ailing housing market.
President Barack Obama, through the United States Treasury Department, has pledged on Thursday that it will continue to provide financial support to mortgage giants Fannie Mae and Freddie Mac despite huge losses this year, adding that he will remove the credit line ceiling to allow the company to operate even further next year.
The two embattled mortgage giants were in bad need of financial assistance from the US government due to the recent downfalls during and after the recession.
The Obama administration has openly said that it will continue to back Fannie and Freddie even at the stake of having huge losses by the next three years.
By doing so, the government has demanded the two mortgage giants to lower the size of its mortgage-related investments starting next year, allowing the firms to provide more help in the housing industry, which is in dire need of financial back up after being hit the hardest by the recession.
To date, both Fannie and Freddie have already tapped over $111 billion worth of credits from the government. Each of the firms has $200 billion credit line.
However, several critics has condemned the move by the Treasury Department, saying that the announcement came in a hastily manner since it was broadcasted just hours after the two firms said that it will give its high-ranking officials around $6 million salaries on an annual basis for this year.
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