Reply #60: Greenspan: Mortgage Debt May Be Threat

[54anickel]

http://news.yahoo.com/news?tmpl=story2&cid=509&u=/ap/20040224/ap_on_bi_ge/greenspan_mortgage_giants_2&printer=1

Greenspan said that the two institutions, popularly known as Fannie and Freddie, have grown to be among the largest financial institutions in the United States and now stand behind $4 trillion of home mortgages, or more than three-fourths of the single-family mortgages in the United States.

Greenspan said he believed both institutions have managed their financial risks well to date, but he said that he believed risks would rise if the two institutions allowed their debt levels to grow in the future without any restraints.

He said that "future systemic difficulties" could be considered likely and he urged Congress to take action "sooner rather than later."

With his testimony before the Senate Banking Committee, Greenspan put his considerable influence on financial matters behind a growing effort to overhaul the two institutions, which financial competitors contend have become too big and now threaten the security of the financial system.