Mortgage Market Shake-Up: New Rules, More Risk

The housing finance world is buzzing with changes. Bill Pulte, the head of federal housing finance, has given Fannie Mae and Freddie Mac the green light to buy way more mortgage bonds. Initially, the limit was $40 billion for each, but now it's up to $225 billion. That's a huge jump! This move could mean more risk for these government-backed lenders. Some folks are worried because it goes against the rules that were put in place after the big financial crisis. Back then, Fannie and Freddie had to be bailed out, and limits were set to keep them from taking on too much risk. Pulte says this isn't a big deal and that the lenders won't buy more than the $200 billion that the president originally ordered. But the email sent to Fannie and Freddie doesn't say that. It just tells them to buy more bonds to try and lower mortgage rates.Some people in Congress are raising their eyebrows. They say this won't do much to lower rates in the long run. They also point out that the real problem is the shortage of homes, not the mortgage rates. Pulte has been making waves since he took over. He's fired some executives and pushed for some unusual ideas, like 50-year mortgages. He's also been behind some controversial investigations, like the one into the Federal Reserve Chair. The big question is whether this move will help or just create more problems. Some experts say it's like a sugar rush—it might feel good now, but it won't last. Others worry that it's a step back to the risky behavior that caused the financial crisis in the first place.