Billions Freed Up For Fannie Mae, Freddie Mac

CBS News Timeline: Credit Crunch

WASHINGTON (AP) ― The government announced Wednesday that it is freeing up billions of dollars at Fannie Mae and Freddie Mac, money that would be used to help homeowners refinance mortgages on the brink of default. The Office of Federal Housing Enterprise Oversight, which oversees the government-sponsored companies, unveiled a plan to ease mandatory capital requirements now in place. It said the plan is expected to result in an immediate infusion of up to $200 billion into the market for mortgage-backed securities. The mandatory cash cushion for Fannie and Freddie - now nearly $20 billion for the two - will be reduced by a third under the new deal. The freed-up money will go toward buying mortgages of struggling homeowners to enable them to refinance into more affordable loans.
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