Fannie Mae and Freddie Mac will help finance mortgage banks

As reported by the Wall Street Journal the regulator of U.S. government-controlled Fannie Mae and Freddie Mac is seeking to have the two companies contribute to the general efforts to finance small mortgage banks heavily impacted by the credit crunch.

According to a Federal Housing Finance Agency (FHFA) spokeswoman the regulator is considering different options how the two mortgage finance companies might help stimulate the market of warehouse loans - a key source of funds to mortgage banks.

John Courson, chief executive officer of the Mortgage Bankers Association, reported that a detailed scheme for Fannie and Freddie to help mortgage banks obtain credit should be ready to be presented to the FHFA within about a week.