New Fannie, Freddie rules on the way

CNN Money reports:

The federal regulator of Fannie Mae and Freddie Mac will set new rules early next week governing the mortgage finance companies' portfolios, which play a crucial role in the nation's housing market.

The Federal Housing Finance Agency is required by Congress to issue regulations ensuring the companies' portfolios are backed by sufficient capital, while keeping in mind their ability to provide funding for the mortgage market by turning home loans into securities. Their portfolios contain mortgages and securities backed by home loans.

Don't expect the new "regulations" to demand 20% downpayments which is 5 to 1 leverage.Don't expect the new regulations to demand 50% downpayments(the prudent rule before the New Deal).Expect the federal government to promote more leverage to homeowners.