“The good news is right now there’s a bipartisan group of senators working to end Fannie and Freddie as we know them. And I support these kinds of reform efforts.”

This was a quote from Barack Obama on August 6th of this year and it will be interesting how this whole operation shakes out. Obviously Fanny and Freddie have done their role in keeping the interest rates low while the economy rebounds. What happens if their role disappears?

Two things would likely happen:

1.) Interest rates will increase- Without Fannie and Freddie holding them down, the rates would most likely go up to the average level of around the 5-8% mark.

2.) The 30 mortgage could go away- Our neighbors in Canada don't have the 30 year mortgage. They have a payoff of 25 years with the interest rates adjusting for the market conditions every 5 years. Interesting?! I suppose that makes sense for banks right???

Either way, both consumers and Realtors need to stay frosty with what's happening with both of these organizations.