Fannie Mae Getting Bubble Jitters


    In a recent report to homebuilders, Fannie Mae said that the probability of housing busts has “risen sharply in certain parts of the country.” Fannie Mae, which along with Freddie Mac, helped finance 43% of all home loans in 2004, raised particular concern about lending standards and the rising tendency of buyers to use variable and interest-only mortgage products. Nearly 24% of sub-prime loans fell into one of those two categories last year. The report also noted that mortgage borrowings rose to an average of 91% of the home value in 2004, up 6% from 85% in 2001. Of course, the report came with the big fat disclaimer that it is impossible to know whether there is a housing “bubble” until after the fact.
    Comment: So tell us something we don’t know.
    Fannie Sees Higher Risk of Regional Housing Busts [WSJ]

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