What happened to IndyMac?

Pasadena, California-based IndyMac Bancorp, Inc. is now IndyMac Federal Bank, FSB, after federal regulators seized and froze home equity lines of credit assets last Friday. What is something Senator Schumer said? After he released a letter indicating that IndyMac would collapse without intervention, there was a run on the bank for over $1.3 billion.

How should Freddie Mac and Fannie Mae be rescued?

The Bush Administration would like to expand the Treasury credit line (a blank check from the taxpayers, asked the members of the Senate Banking Committee?) and buy equities in Fannie and Freddie. This is not being met with enthusiasm by Congress, but the rescue plan did have some support on Tuesday. Fannie and Freddie, a major source of funding for banks and other home lenders, are companies set up by Congress and owned by shareholders. Their recent bail-out has caused shares to fall 26% for Freddie and 27% for Fannie, further threatening the broader financial system. Treasury Secretary Paulson hopes the proposal to stand behind Fannie and Freddie is included in a broader housing reform bill.

Senate Passes FHA Modernization.

Over 90,000 REALTORS mobilized to contact their Senators in favor of housing bill HR 3221. It passed on July 11th with a vote of 63 to 5 to approve legislation that is hoped to create affordable housing opportunities by setting loan limits up to $625,500 for Fannie Mae, Freddie Mac and FHA. It will stimulate housing demand with a temporary $8,000 home ownership tax credit if Congress convinces the President over the next few weeks that this will help to restore confidence in the mortgage and housing markets. Stay tuned…