With Fannie Mae and Freddie Mac agreeing to expand their purchases of US mortgages one has to wonder what took them so long?
These two institutions are the biggest source of money for US home loans. With a new infusion of capital this can benefit the housing market or at least slow the carnage which has been dogging our economy for two years.
One upon a time this was exactly the purpose of having Freddie and Fannie,somehow between horrific book keeping procedures and a lack of good management these two behemoths have been lost in the malaise for the last 5 years! How did this happen and why?
From all accounts it appears an infusion of $200 billion will be placed back into mortgage back securities. If this happens this can guarantee both entities are able to back almost $2Trillion in new mortgages.
From all accounts it appears an infusion of $200 billion will be placed back into mortgage back securities. If this happens this can guarantee both entities are able to back almost $2Trillion in new mortgages.
Although I`m a bit skeptic, if this is properly executed the "housing market" could stabilize in a year.
Next issue we as Americans need to deal with is the "Credit Crisis" which can hamper the entire reason why Fannie and Freddie have jumped back into the housing market.
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