Monday, January 30, 2012

Is Freddie Mac Betting Against Homeowners?



Is Freddie Mac trying to help homeowners-or hurt them?

A recent investigation into trades made by the taxpayer-owned mortgage giant shows that while Freddie with one hand is helping consumers get mortgages, it is, with its other, making those mortgages harder to refinance. Result: Homeowners trying to refinance their way out of high-interest mortgages say they feel trapped in "financial jail."

The investigation-a joint effort between National Public Radio and ProPublica, an independent, non-profit investigative news service-looked at multibillion-dollar investments made late in 2010 by Freddie. These investments pay off only if homeowners remain locked in high-interest mortgages.

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