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A slew of proposals are floating around Capitol Hill on how best to manage Katrina-related property damage including one that would have Fannie Mae and Freddie Mac act as an investor and manager of delinquent loans.
"The GSEs could buy loans and put them on their balance sheet," said one mortgage executive familiar with the proposal.
The executive, requesting anonymity, likened the concept to Fannie and Freddie acting in an "RTC-like" capacity. RTC is a reference to the Resolution Trust Corp., the S&L bailout agency created to clean up the nation's thrift crisis.
The official stressed that the mortgage and real estate industries are just now realizing that many of the damaged...