THE VOICE OF HOUSING IN WASHINGTON BLOG

Delinquency rates on residential mortgages hover around 7%. It is widely expected that 4 million to 5 million mortgages will enter foreclosure over the next two years if nothing is done. In response, states and large servicers are enacting widespread foreclosure moratoriums to force lenders to negotiate with borrowers more aggressively.

Outgoing Treasury Secretary Paulson has suggested that Congress should replace Fannie Mae and Freddie Mac with one or two private-sector entities. Those entities would purchase and securitize mortgages with a credit guarantee backed by the federal government, and would not have investment portfolios.