Mortgage rates sank to the lowest level in decades this week, but the low rates have failed to spark home sales. Mortgage rates for 30-year fixed loans this week are 4.44 percent.
Mortgage giants Freddie Mac and Fannie Mae, between them, have needed $148.2 billion in bailout money since late 2008 to stay afloat. The aim is to ensure that mortgage credit remains available.
Freddie Mac is asking for $1.8 billion in additional federal aid after posting a larger loss in the second quarter.
LEHMAN BROTHERS - RICHARD FULD: Under Mr. Fuld’s leadership at Lehman, the company underwrote more mortgage-backed securities in 2006-07 than any other firm. The housing market crash showed Lehman's exposure to these high-risk financial instruments and the firm began to lose money. Fuld refused offers to sell, and the Treasury Department did not engineer a rescue, as it did for another investment bank. Lehman's bankruptcy in late 2008 also ended Fuld's job. Code Pink protesters hold up signs as Fuld testifies at a House Oversight and Government Reform Committee hearing in October 2008.
President Obama signed a sweeping financial reform bill into law Wednesday giving the federal government new powers to regulate Wall Street.
After signing the financial reform bill, Obama must work to end the corruption inherent in any federal institution designed to boost homeownership. Congress was bought off by the housing industry to lower lending standards, creating the market bubble. Fannie Mae and Freddie Mac need to go.