Federal Reserve Chairman Alan Greenspan, a fierce advocate of limiting the size of Fannie Mae's and Freddie Mac's portfolios, is now wringing his hands over the size and complexity of their hedging strategies.In a Sept. 2 letter to Sen. Robert Bennett, R-Utah, released Thursday morning, Mr. Greenspan writes that "[a]s Fannie and Freddie increase in size relative to the counterparties for their hedging transactions," their ability "to quickly correct the inevitable misjudgments inherent in their complex hedging strategies becomes more difficult." The letter adds that "excessive caution" in reducing their portfolios could destabilize the U.S. financial system and eventually diminish the availability of mortgage money to consumers. Fannie and Freddie hedge their portfolio risk by investing in derivatives through Wall Street.
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A federal judge in Texas dismissed the Consumer Financial Protection Bureau's medical debt rule and prohibited states from passing their own laws prohibiting medical debt on credit reports.
5h ago -
Dr. Mark Calabria takes on the additional role of chief statistician of the United States; retired Ally Bank executive Diane Morais has joined First Citizens Bancshares' board of directors; MainStreet Bank has promoted Alex Vari to chief financial officer; and more in this week's banking news roundup.
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While refinances are behind the latest increases, the pace of purchase activity may be a stronger indicator of where the housing market sits.
10h ago -
The share of economists expecting a September rate reduction grew in the July Wolters Kluwer survey, but the October or later percentage also increased.
10h ago -
Rising home prices and softening sales offer a mixed view of a market that some say is shifting to favor buyers.
11h ago -
The notes are backed by home improvement installment loans originated by approved dealers in Foundation Finance Company's network.
11h ago