Fannie Mae and Freddie Mac

The decision by the U.S. government this month to take over mortgage giants Fannie Mae and Freddie Mac represents a significant move in the recent mortgage crisis. The intervention is designed to shore up the struggling mortgage industry which should have a ripple effect on the closely related housing market.

Fannie Mae and Freddie Mac are the two largest mortgage companies in the United States and are responsible for the majority of home mortgages in the country. During recent months the mounting number of defaults has put the companies in jeopardy of collapsing, an event that would be catastrophic to the already faltering economy. In a preemptive move, the government has opted to step in and assume control of the lenders, providing both leadership and capital.

The bail-out has far-reaching consequences for the government, tax payers and the ultimately the national economy. But what does it mean for U.S. homebuyers? For right now the ball remains in the buyer’s court. The market will need time to react to the news, so the advantage is still with those looking to buy.

As always, an informed buyer is in a better position to make the most of the market conditions. Take the time to read about the government plan and all the different opinions on the possible effect on the market. Once you have done a little background research, call your real estate professional and mortgage broker to gain their insights. If you are in the market to buy, you will want to do it before the pendulum swings the other way and buyers lose their upper hand.


One Response

  1. Most people don’t realize how much money there is out there. During economic times like this, there is more money to be had than ever. Because of the bailouts and economy, lenders are bending over backwards to bail you out too. Believe it or not, there is people getting tons of cheap money nowdays to start businesses, buy homes, pay off debt, and more. Bailouts for Everyone

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