Tuesday, August 9, 2011
8/9/2011 - S&P Downgrades Fannie Mae, Freddie Mac
They’re just getting started: Muni Market Prepares for Lost AAA Ratings; “Hundreds and Hundreds” of Downgrades.
Standard & Poor’s downgraded the ratings of government-sponsored enterprises Fannie Mae and Freddie Mac Monday, citing their reliance on U.S. government.
Both Fannie and Freddie were lowered to AA+ from triple-A. The Federal Home Loan Banks were also cut to AA-plus.
Fannie and Freddie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion. As part of a nationalized system, they account for nearly all new mortgage loans. Their downgrade might force anyone looking to buy a home to pay higher mortgage rates.