REVISING MORTGAGE RULES: CAN THERE BE AN AGREEMENT?

With the expectation that hundreds of thousands of homeowners are likely to lose their houses as subprime mortgages are scheduled to raise interest rates over the next 18 months, Democrats propose that "Fannie Mae and Freddie Mac, which guarantee conventional mortgages of up to $417,000, [be allowed to] buy and hold many billions of dollars’ worth of additional mortgages in their own portfolios."

The Bush administration has been, and still remains somewhat, opposed to such a move, reasoning that taxpayers everywhere are put at risk if the investments turn out to be bad for such government-sponsored companies.

To read about how the Bush administration and the Federal Reserve are moving closer to an agreement with House and Senate Democrats regarding this issue, click here.