The Federal Housing Finance Agency (FHFA) Office of Inspector General (OIG) stated in a White Paper report that Fannie Mae, Freddie Mac & FHA continue to face Billions of losses from Interest Rate fluctuations. The Government (We the People) face an estimated $1.3 Trillion in possible GSE portfolio risk.
The government has offered a 2-fold Strategy to mitigate interest rate risks; 1.) is to issue more mortgage-backed securities (MBS) to investors; 2.) The GSEs can also use derivatives, which act as a form of insurance and provide financial protection for when rates fluctuate.
Does this strategy sound just a little familiar to you... it certainly does to me...!! Toxic distressed mortgage assets contributed in large measure to this economic recession...!!! Now, the best answer we have is doing more of the same expecting different results... INSANITY...!!!
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