SP downgrades Freddie Mac and Fannie Mae to AA+

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The US government is not the only one to see their rating cut by Standard & Poor's. The agency has cut mortgage lenders Freddie Mac and Fannie Mae's rating from the highest triple A to AA plus.

S&P says the downgrade reflects the close relations of mortgage ratings and the government debt. Meanwhile, the two mortgage giants have been under conservatorship by the U-S government since 2008. As a result, their debt is exposed to economic volatility and any further downgrade of long-term U-S. debt.

Experts say downgrades of the U-S or mortgage finance titans remains the biggest threat to the nation's housing market. But former White House economic advisor Glenn Hubbard believes the drop of consumer confidence and the plunging stock market are likely to be the main drivers to affect America's property market.

SP has cut mortgage lenders Freddie Mac and Fannie Mae's rating from the highest triple A to AA plus.

He said, "Clearly ratings downgrades are not good for interest rates and mortgage rates but the bigger fear for the housing markets is probably what's rippling through consumer confidence and the equity markets so Fannie and Freddie downgrades will have some effect but I think it's more modest than these macro effects from lost confidence."

Editor:Li Wanran |Source: CNTV.CN


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