The Chief Financial Officer of Freddie Mac apparently committed suicide this morning or last night. The New York Times says there is no way to know yet whether his death is related to an ongoing investigation of Freddie's finances.
Meanwhile, Fannie and Freddie have reported a 70 percent surge in delinquencies of prime mortgages (like these, perhaps?), and the Treasury Department has quietly doubled the taxpayer backstop--to $200 billion--to both Freddie and Fannie Mae, the twin government-sponsored entities that buy up mortgages from the banks and other lenders. This according to a letter from the Federal Housing Finance Agency to Sen. Chris Dodd (D-CT), which was released yesterday (thanks, CR).
Among the not-surprising stats buried in this letter:
At the end of January, Fannie and Freddie had about 1.2 million 60-day mortgage delinquencies in preforeclosure, while government-sponsored programs enabled 8,953 loan modifications to be completed--or roughly three-quarters of one percent of the delinquent loans in the foreclosure pipeline.
At the end of March, Fannie and Freddie, along with several other mortgage servicers, quietly ended a foreclosure moratorium announced last November. So there are millions more foreclosures heading down the pike.
All of this would appear to be bad news, and will be depicted as such by government and most media outlets. But it bears remembering: paying too much for shelter, usually in the form of interest to a banker, means having less money to spend on other, more productive pursuits.
So consider this argument on why foreclosures-and the debt relief that comes with them-might be a good thing.