Freddie Mac, Mortgage | featured news

The U.S. regulator for Fannie Mae and Freddie Mac accuses the banks of negligence in misrepresenting the risks embedded in the securities sold to the home-finance giants.

Mortgage finance giant Freddie Mac FMCC.OB said on Monday it would ask for an additional $1.5 billion from taxpayers due to losses stemming from the weak housing market.

U.S. mortgage rates dropped to new lows after the latest round of gloomy economic data hurt Treasury yields, according to Freddie Mac's weekly survey of mortgage rates.

Two lawmakers are set to unveil legislation to replace Fannie Mae and Freddie Mac with at least five private companies that would issue mortgage-backed securities with explicit federal guarantees.

A federal watchdog criticized federal regulators' oversight of executive pay packages for top officials at Fannie Mae and Freddie Mac in a report published Thursday. The top six executives at the mortgage giants earned $35 million in the last two years, according to the report from the inspector general of the Federal Housing Finance Agency, which regulates the mortgage giants.

The Obama administration on Friday released its long-awaited proposal for overhauling the mortgage market, calling for gradually shutting down bailed-out Fannie Mae and Freddie Mac and reducing the government's now huge role in housing finance.

The total cost to rescue and then overhaul mortgage giants Fannie Mae and Freddie Mac could reach $685 billion, according to estimates by Standard & Poor's.

The housing and mortgage markets aren't likely to improve much over the next year, which will make it harder for the government to reduce its support of the sector, Freddie Mac's chief executive said on Monday.

That figure, projected through 2013, represents a worst-case scenario that assumes a double-dip recession, the Federal Housing Finance Agency says. The finance giants have so far received about $148 billion in taxpayer funds.

Federal Housing Finance Agency is seeking billions in repayment from banks that sold bad loans to the mortgage giants to help offset taxpayer losses, but some financial institutions are balking.