Federal softens restrictions on Freddie, Fannie
- March 19, 2008
Federal regulators loosened restrictions on mortgage finance firms Freddie Mac and Fannie Mae on Wednesday, opening up to $200 billion for the mortgage markets.
The Office of Federal Housing Enterprise Oversight reduced the amount of cash the companies must keep from 30 percent to 20 percent. Those restrictions were put into place following accounting scandals at both firms.
Fannie and Freddie will use the cash to buy mortgages of homeowners who are having trouble paying their mortgages. The move will allow those homeowners to refinance to more affordable mortgages.