Fannie and Freddie: Mortgages With No Money Down Still Available

The Washington Post reports:

Despite the bursting of the housing bubble, it's still possible to buy homes with no money down. In fact, it's possible to borrow up to 105 percent of the purchase price, leaving the buyer with more debt than the house is worth.

It might sound like a pitch from a late-night infomercial. But the offer comes from Freddie Mac and Fannie Mae, two government-chartered companies with potentially conflicting mandates to uphold prudent lending standards and make homeownership more attainable.

Freddie Mac says its "HomePossible" mortgages can help buyers with limited credit or savings, including teachers, firefighters and members of the military.

But, as a wave of foreclosures shows, stretching too far to buy a home can end badly.

You'll hear little criticism from Barney Frank(Democrat-Fannie Mae) on this one.The rules of sound finance just don't apply to Fannie and Freddie.All those campaign contributions sure pay off.