WHEN: TODAY, FRIDAY, FEBRUARY 4TH AT 3PM ET
WHERE: CNBC'S "CLOSING BELL"
Following is the unofficial transcript of breaking news from CNBC's Steve Liesman. All references must be sourced to CNBC.
STEVE LIESMAN: THANKS VERY MUCH BILL CNBC HAS LEARNED THAT A TREASURY PLAN TO OVERHAUL FANNIE AND FREDDIE LIKELY TO BE RELEASED NEXT WEEK WILL CALL FOR THE COST OF GOVERNMENT INSURANCE IN THE MORTGAGE MARKET AND ESSENTIALLY THE FEES THAT FANNIE AND FREDDIE CHARGE THE MORTGAGE INSURANCE THEY ARE TO RISE OVER THE NEXT FIVE TO SEVEN YEARS ACCORDING TO PEOPLE FAMILIAR WITH THE PLAN THE GOAL IS TO REDUCE THE FANNIE AND FREDDIE SHARE OF THE INSURANCE MARKET FROM THE CURRENT LEVEL OF 95% DOWN TO BELOW 50% RAISING THOSE COSTS SO THAT THE PRIVATE SECTOR COMES IN THE PLAN WILL ALSO CALL FOR REDUCING THE AMOUNT OF A MORTGAGE THAT CAN BE GUARANTEED FROM 730K DOWN TO 625K THE TEMPORARY LAW THAT RAISED THE LIMIT IS SUPPOSED TO EXPIRE IN SEPTEMBER AND THE TREASURY PLAN ACCORDING TO THESE PEOPLE WILL RECOMMEND THAT CONGRESS ALLOW THAT TO HAPPEN HOWEVER THE PLAN IS LIKELY TO ONLY OFFER THREE OPTIONS OF WHAT SHOULD BE DONE WITH THE GSEs AND NOT RECOMMEND A SPECIFIC COURSE OF ACTION THOSE THREE OPTIONS ARE FIRST THE GOVERNMENT INVOLVEMENT IN THE HOUSING MARKET THROUGH FHA MEANING THE GOVERNMENT ONLY REALLY PROVIDES LOW INCOME ASSISTANCE SECOND OPTION FHA ASSISTANCE COMBINED WITH SOME BROAD GOVERNMENT EMERGENCY BACKSTOP OF THE HOUSING SYSTEM DURING A CRISIS THIRD OPTION WOULD CALL FOR FHA AND A LIMITED FORM OF GOVERNMENT RE-INSURANCE OF THE MORTGAGE MARKET ESSENTIALLY PRIVATE SECTOR FOR THE FIRST PART AND THEN GOVERNMENT BACKSTOP OF THE INSURANCE THE MESSAGE FROM TREASURY WE ARE TOLD WITH THIS PLAN WOULD BE THAT AMERICANS WILL HAVE TO GET USED TO PUTTING MORE EQUITIES IN THEIR HOMES AND PAYING MORE FOR THEIR MORTGAGES SOURCES CAUTION HOWEVER THAT CHANGES TO THE PLAN COULD YET BE MADE IN THE WEEK BEFORE IT IS RELEASED GUYS SOME TIME NEXT WEEK IS WHEN WE EXPECT TO SEE THIS PLAN.
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