Mortgage loans in the news

Mortgage loans are in the news today as two of the largest mortgage companies in the United States, Fannie Mae and Freddie Mac, lost nearly half of their stock value during the week of July 11, 2008.  They own over one half of all the mortgages in the United States, with a total value of $5.2 trillion dollars.  They have posted $11 billion in losses. 

For the average Joe, those numbers are barely imaginable. But wait...let's see what $5.2 trillion looks like...$5,200,000,000,000.00.  So if they've lost $11,000,000,000.00 what is left? Try $5,189,000,000,000.00.

So what percentage of their assets did they lose?  I believe that would be .002. Please correct me if I'm wrong. To relate that to everyday living, if your monthly take home pay was $3,000 and you lost .002 percent of that, how much would that be?  $6.00. 

Is that why Senate Banking Committee chair Christopher Dodd (D-Conn.)  called the mortgage giants sound, saying they are being unfairly punished by Wall Street?

Suggested Reading

• Why Our Housing Market Failed and Why a Bailout is Necessary