House Democrat and Financial Services Committee Chairman Barney Frank, has drafted a bill that temporarily increases the caps on Fannie Mae‘s and Freddie Mac‘s portfolios for six months so the two mortgage giants can purchase modified or refinanced subprime loans.
The bill would increase the caps on the companies’ $700 billion portfolios by 10%, but 85% of any mortgages purchased must benefit struggling subprime borrowers.
“The six month/85% bill that I am filing seems to me responsive to the immediate needs to help people avoid foreclosure,” Rep. Frank said. The House committee chairman is also preparing to introduce a bill aimed at stopping abusive lending practices.
Tags: Fannie Mae, Foreclosure Market, Freddie Mac, Government Sponsored Enterprise (GSE), Stop Foreclosure
