Fannie Mae interest rate jumped 0.80 points on 100 Mortgages

Fannie Mae who along with Freddie Mac received a government bailout earlier this year sold $2 billion in bills at highest interest rate compared with sales of the same maturities a week ago. This is further evidence of the strain the money markets are under.

From last week’s auctions interest rates jumped 0.80 points. Both Fannie Mae and Freddie Mac are reliant on short-term funding in their borrowing mix, and often need to roll over maturing debt along with a host of other companies.

Meanwhile the FBI are investigating both Fannie Mae and Freddie Mac to find out if executives intentionally gave the wrong information to the stock market about the health of their business that led to the collapse of the US mortgage industry. Lehman Brothers Holdings Inc and AIG are also among the largest financial institutions are scrutiny from the FBI.

Source: Reuters

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