Mortgage Bailout Future Improving

By Robert Davis
Oct 22 2010

The Federal Housing Finance Agency announced today that the bailout of the two largest mortgage companies has improved.

Citing new interests in the market, Freddie Mac and Fannie Mae are set to receive only $19 billion more in bailout funds this year, far less than the $300 billion that was originally projected for the troubled finance companies.

With the economy recovering at a faster pace than expected both mortgage companies have improved in their financial standing ahead of the analysts estimates. The improvement is due in part to the new federal guidelines for mortgage lending as well as an increase in commercial spending.

The $19 billion in bailout funds that are set to be delivered to Freddie Mac and Fannie Mae will be spread over the next three years with the first payment of $6 billion to be delivered before the year’s end. Experts have said that this will ease the burden on the taxpayers who are footing the bill for the bailout project.

Both companies were seized by the federal government in 2008 after poor lending practices led to their near collapse. Billions in defaulted loans were bankrupting the mortgage giants and further complicating the economic crisis in the US.

The White House is hopeful that the worst is over in the housing crisis for the US. Citing improvements in some sectors of the housing market, federal leaders have said that home prices seem to have hit rock bottom and will likely begin to increase with the coming year.