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September 8th, 2008

Fannie & Freddie Takeover: What’s It All About?

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Every homeowner has heard about Fannie Mae and Freddie Mac; odds are they own and/or service your home loan. So what’s all this about a bailout?

Fannie and Freddie purchase mortgages from lenders as part of the never-ending cycle of the mortgage market. The two GSEs either own or guarantee about $5 trillion of mortgages, but their portfolios have suffered as much from the year-long credit crunch as many mortgage lenders. Thus, on Sunday, the government decided that the two giants couldn’t go on and took them over.

The markets have anticipated this move for over a month, and the response has been immediate. Thirty-year fixed rate mortgages have been dropping all day, and we’re likely to see a fall of a quarter percent from Friday’s national average of 6.55%.

“We saw rates rise about a quarter percent in July when this bailout plan was first unveiled,” said Keith Gumbinger, VP at HSH. “There was a lot of market uncertainty about what was going to happen. Now that uncertainty is gone, so we’ll see rates drop in response” as the markets react.

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One Response to “Fannie & Freddie Takeover: What’s It All About?”

  1. Paterik Says: September 25th, 2008 at 12:51 am

    GOVERNMENT BAILOUT?

    HELLO AMERICA. WAKE UP!

    THIS BAILOUT SCHEME IS JUST A SMOKE SCREEN TO DIVERT YOUR ATTENTION AWAY FROM THE REAL PROBLEM WITH OUR ECONOMY, AND A SMOKE SCREEN TO DIVERT AND DISSUADE YOU FROM RUNNING DOWN TO THE BANK AND TAKING YOUR MONEY HOME WHERE IT WILL BE SAFE AND OUT OF THE REACH OF THE FAT CATS WHO CAUSED THIS WHOLE ECONOMIC DISASTER IN THE FIRST PLACE.

    WE ARE HEADED, LIKE A RUNAWAY LOCOMOTIVE WITH NO ENGINEER ON BOARD, FOR ANOTHER ‘GREAT DEPRESSION’!

    JUST ASK ANYONE, WHO IS STILL AROUND, FROM THE LAST GREAT DEPRESSION OF THE 1930′S.
    THEY, THE FAT CATS, DID THEN WHAT THEY’LL DO NOW IF THEY THINK YOU’LL PULL A RUN ON THE BANKS. FIRST THEY’LL TELL THE BANKS TO CLOSE AND LOCK-UP, THEN THEY’LL TELL YOU THAT IT IS ILLEGAL FOR YOU TO PULL A RUN, FOR YOUR MONEY, ON THE BANKS! IF YOU TAKE OUT YOUR MONEY, THE FAT CATS WON’T BE ABLE TO GRAB IT FOR THEMSELVES!

    I’VE BEEN TELLING THOSE WHO KNOW ME FOR THE LAST FIVE YEARS THAT THIS WAS COMING AND WE HAVE NOT EVEN BEGUN TO REACH THE BOTTOM! THAT’S WHY THIS ADMINISTRATION IS IN SUCH AN ALL-FIRED-UP RUSH TO GET THIS ILL THOUGHT OUT BAILOUT PASSED RIGHT NOW AT YOUR EXPENSE! AND AFTER WE BAILOUT THESE THIEVING FAT CATS WHAT ARE THEY GOING TO DO FOR US, TAXPAYERS WHO ARE FOOTING 100% OF THE BILL???

    YOU CAN BET YOUR LAST DOLLAR THAT THESE FAT CATS ARE NOT GOING TO GIVE UP OR LOOSE ANY PART OF THEIR ‘GOLDEN PARACHUTES’! BUT YOU CAN EXPECT TO LOSE YOUR LIFES’ SAVINGS IN A FLASH! I GOT MINE OUT. NOW THE REST OF YOU ARE ON YOUR OWN! GOOD LUCK.

    AND FOR THOSE OF YOU DON’T THINK THIS ADMINISTRATION WOULD STEAL ALL YOUR LIFES’ SAVING AND LEAVE YOU DESTITUTE, I HAVE A BRIDGE IN THE EVERGLADE FOR YOU TO INVEST IN. DON’T WORRY, I’LL GUARANTEE IT, AND WE’LL FIGURE WHERE IT GOES TO AFTER I GET ALL YOUR INVESTMENT MONEY!

    PATERIK

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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