This will be interesting to watch over the next few months. It may or may not be a blessing for the mortgage industry. If you read the 10 page release; It seems to me that this is a response to the c inability to raise & responsibly use capital.

This whole process amounts to the government firing the 2 boards (at each company) and installing new CEOs. (I.e. the Vice Chariman of Merrill Lynch will now be CEO of Fannie Mae) in an effort to establish a more profitable business model.

One noteworthy blurb in the release is the United States Treasury pledge to boost Freddie and Fannies buying power by 20 billion a month (yes billion). Which could better liquify ( & stabilze) the secondary mortgage market and might cause a drop in rates. On the other hand, if I understand this as it reads, the possibility exists that overspending or bad spending may occur and cause a total failure - effectively eliminating the secondary market all together. Since it is heavily dependant on those two organizations if you ignore the few  private investment firms and insurance companies.

Here's hoping that Congress will step in well before a total failure is possible.