Double Down: Fed Regulators Let GSE’s Expand Mortgage Leverage

Another turn in the mortgage meltdown is marked by today’s announcement (ht Calculated Risk) that Fannie Mae and Freddie Mac’s regulators are allowing them to reduce their capital reserves from 30 percent to 20 percent. The result: expanded mortgage lending by scandal-plagued, politically controlled firms into a declining real estate market with fewer assets to back up that lending….

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