Salt Lake City, UT / January 27, 2008 / Press Release / --  For years Fannie Mae and Freddie Mac have been the cornerstone for the American Dream of Homeownership.  With nearly $10 trillion in outstanding home loans, Fannie and Freddie currently guarantee nearly half of those loans.  But in an attempt to boost the U.S. economy, the Bush Administration may have inadvertently compromised the safety and soundness of loans that Fannie and Freddie would guarantee by increasing their limits from $417,000 to nearly double that.   

While some economist and analyst may side with the fact that the jumbo loan market could benefit greatly from Fannie and Freddie mortgage limit increases, others side on the wave of caution.  Federal Reserve Chairman Ben S. Bernanke in a letter to Representative Barney Frank said easing restrictions on the companies could prove to be "ill advised."

But at the heart of this debate is whether or not the two giants can do what so many  couldn't - Stop Real Estate Fraud.  The nation has witnessed housing prices increase to record levels, most of which seem to stem from real estate's speculative buying market.

Television programming made flipping homes mainstream and while millions tuned in millions more were putting together sham real estate deals to cash in on what the FBI  deemed the billion dollar industry of fraud. 

"Without knowing how to stop the fraud all that's really being done here is a shifting or spread loading fraud from portfolio to portfolio," says Sheri Fitzpatrick, CEO of the nationally recognized non-profit Perfect Home Living that combats real estate fraud through educational awareness.  "Even with technology criminals and their enterprises are able to beat a system that truly has not been updated since the inception of the banking system and with this latest move, the Bush Administration is once more shifting fraud, but now dangerously enough to Fannie Mae  and Freddie Mac," Fitzpatrick continued.

In places like Utah, which according to the MARI Index ranked number in the nation for mortgage fraud, has demonstrated that its house values over $417,000 are ripe with fraud  but according to the White House, this uncharted territory is where Fannie and Freddie will begin to pick up the slack for distraught lenders.  

OFHEO Director James Lockhart opposes raising the cap for Fannie and Freddie without additional oversight.  "We just don't think it would be good to divert resources and manpower of these two firms from doing what they do best, which is supporting the conforming loan market," Lockhart stated in a recent BusinessWeek interview.  "They don't have pricing models, they don't have risk management models.  So it would be a new world."

About Perfect Home Living 

Perfect Home Living is a nationally recognized leader that assists in implementing programs and providing training and education to financial lenders , government entities, consumers and licensed professionals to red flags within today's  real estate market.   For more information or to request assistance please visit us online at:  http://www.PerfectHomeLiving.com