Mortgage News
S&P downgrades US mortgage giants
Credit agency Standard & Poor’s (S&P) has downgraded America’s state backed mortgage lenders Fannie Mae and Freddie Mac, as it warned that America is unlikely to regain its AAA rating soon.
Its decision to downgrade the lenders was due to their “direct reliance on the US government” S&P said, according to the BBC.
It follows the agency’s move to strip the USA of its top AAA rating for the first time ever on 5 August.
David Beers, head of sovereign ratings at S&P, said: “We still think that the risks to the rating are still pitched to the downside – that’s why we have a negative outlook. We don’t anticipate a scenario at the moment in which the US would quickly return to AAA.”
However, US Treasury Secretary Timothy Geithner has criticised the decision, telling NBC that S&P had shown “terrible judgement” and “a stunning lack of knowledge about basic US fiscal math”.
