Fannie CEO sees steep home-price drop

[Dems4HowardDean]

Fannie CEO sees steep home-price drop
By MARCY GORDON,AP
Posted: 2008-05-20 16:26:25
WASHINGTON (AP) - Fannie Mae 's CEO told shareholders Tuesday that the housing market is "about halfway through" its crisis and home prices could fall as much as 25 percent before the worst is over.

The largest U.S. buyer and guarantor of home mortgages will be able to weather the downturn and expand its business, Fannie Mae's president and CEO, Daniel Mudd, said as he and other top executives faced shareholders at an annual meeting in New Orleans.

As Mudd spoke, a key Senate panel approved a $300 billion homeowner rescue plan to provide cheaper, government-backed mortgages to as many as 500,000 struggling borrowers. The legislation also includes tougher federal oversight of Fannie Mae and its smaller government-sponsored sibling, Freddie Mac .

Under a key concession to Republicans for backing the plan, the rescue would be financed with a share of the two companies' profits. Fannie and Freddie would finance a new affordable housing fund - intended to aid low-income people - that temporarily would be used to pay for the homeowner rescue. More...

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