Alt A Mortgages Causing a Disproportionate Amount of the GSEs’ Credit-Related Losses
August 14, 2009
Fannie Mae and Freddie Mac essentially eliminated their new Alt A purchases by the second quarter of 2009 but the loans continue to account for nearly half of the government-sponsored enterprises credit-related losses. The GSEs pin the problems on home-price declines and borrowers’ negative equity. According to an analysis of the GSEs’ second quarter earnings... [Includes one chart]