REal Talk with Adam Perrotta-July 22

By Adam Perrotta, News Writer

--A possible safety valve for the beleaguered Fannie Mae and Freddie Mac today, as a plan to allow the Treasury Department to drastically increase the amount of debt securities it can buy from the two agencies is presented to the House Budget Committee. While the plan could go a long way toward aiding Fannie and Freddie, the costs involved--possibly up to $25 billion over 2009 and 2010--might prove too high to justify such drastic action. And by taking on more of the GSEs' securities, the government would become more closely tied to Fannie and Freddie, thereby possibly opening the government up to more risk. For these and other reasons, the plan seems a tricky proposition indeed.

It seems that, despite the collapse of IndyMac Bank earlier this month, Prospect Mortgage has not been scared off from its plan to acquire most of the bank's retail mortgage branches. Though it remains to be seen what effect the closing of IndyMac will have on the terms of the deal, it is safe to say that Prospect will at least give the approximately 80 branches a much needed fresh start, if only by getting them out from under the now-sullied IndyMac banner.