On August 12th in the post Could This Be The End of Short Sales? we wrote about how On August 17th the Treasury was going to be holding a hearing regarding the future plans for Fannie Mae and Freddie Mac. It was rumored that the Obama administration was about to order the government-controlled lenders to forgive a portion of the mortgage debt for Americans who are underwater.
At the end of the day, no new ideas came out of the August 17th summit and it is most likely that there will be little change to Freddie Mac and Fannie Mae for the short term. However, that means the government could continue to bail out the banks. It also leaves open the possibilities that Freddie and Fannie could go as far as writing off all remaining debt or at least refinance all existing troubled loans to current low interest rates.