Fannie Mae + Freddie Mac Bail-out

by | Sep 8, 2008 | How to Guides, Uncategorized

The big news over the weekend was the Federal take-over of mortgage giants Fannie Mae and Freddie Mac. Both companies common stock plummeted in early morning trading and there is speculation that stock holders could lose everything. The good news is that the Federal intervention protects the investors that loan money that is eventually used to fund loans. Between these two companies they hold 50% of all mortgages in the entire USA. I think it is way too early to speculate what this will mean to everyone in the real world of buying and selling homes although early word is that it might make interest rates lower but tighten the ability of people without awesome credit to borrow. If the Fed makes it very difficult or costly to borrow it could end up only helping wealthier investors and having no real difference to average borrowers.

Stay tuned for updates and comments as this develops.

The best article I could find was from the SF Chronicle: Read it here


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