Focus on foreclosures, liquidity

Under their new government-appointed chief executives, Fannie Mae and Freddie Mac are focused on reducing foreclosures, improving liquidity in the mortgage market and restructuring aspects of their business, according to a panel discussion of the executives and their government regulator at the Mortgage Bankers Association annual conference here Monday.

They're working with lenders and loan servicers to ensure foreclosures are avoided where possible -- including measures such as lengthening loan terms and reducing interest rates -- Fannie Mae's and Freddie Mac's chief executives said, and they're also actively working to improve liquidity in the mortgage markets.


The two government-sponsored enterprises were taken over by the government in September, in the first of several government bailouts recently meant to try to halt the spread of the mortgage-fueled credit crisis. Fannie and Freddie own or guarantee almost half of all home loans in the U.S., making the health of the residential real estate market at least in part tied to their well-being.
"This is a very critical time in the economy and certainly in the mortgage markets and we at Fannie Mae are doing all we possibly can," said Herbert Allison, chief executive of Fannie Mae.

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