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Recently-approved bailout may not help mortgage crisis, Barclays says

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The recently approved bailout of government-sponsored enterprises will not have much of an impact on the mortgage crisis, according to recent notes released by Barclays Capital. The GSE bailout will not help the many mortgage-backed securities that are non-agency and are made up of Alt-A loans and pay-option ARMs. The events surrounding the GSEs will neither unclog bank balance sheets nor dampen collateral losses, according to Barclays. “Banks like Wachovia and Washington Mutual have a significant amount of these Alt-As and pay-option ARMs that the GSE bailout just won’t help,” said CNBC’s David Faber. “There is still a crisis going on, despite what the government is trying to do on the Fannie Mae/Freddie Mac front.”

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