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Fannie And Freddie Offer More Loans To Borrowers Who Are Deeply In Debt

A recent report from the Wall Street Journal revealed that Fannie Mae and Freddie Mac are continuously backing loans to borrowers carrying a heftier debt load. In his report, Ben Eisen cited IMF data which showed that more loans are going to borrowers with debt-to-income rations of 43%

"The backing of these loans opens up a debate about the government’s role in the housing market. Some say cheap, federally backed financing has made credit available for millions of borrowers who otherwise might not have had a shot at homeownership," according to the WSJ report.

"Others say that more-indebted borrowers are riskier, and that their purchases may be accentuating a rise in home prices that in many areas has outstripped median incomes."

This raises numerous questions as to what action policymakers will take when looking at housing-finance reform.

To learn more about Eisen's report on Fannie and Freddie loans to borrowers that are deeper in debt, click on the image above.

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