As most of us know, on Sunday the United States government seized control of these two mortgage giants. According to Neil Irwin in the Washington Post this morning, the move was a "dramatic bid to restore faith" in these companies. Treasury Secretary Henry Paulson announced the takeover.
In the AP this morning, President Bush said the takeover was needed to keep them from falling. He said that risk is "unacceptable" for our battered economy. Before anyone wants to lay blame on this administration, both political parties supported the move.
In an article in the Tulsa World, AP writers Alan Zibel and Martin Crutsinger said that Henry Paulson will lead to lower mortgage rates and spur home-buying demand. That would be good for all of us Realtors. I was hoping something could be done about the shutting out of a major portion of buyers come Oct. 1.
The companies own or guarantee about $5 trillion in home loans, about half the nation's total. Both companies were placed into a government conservatorship that will be run by the FHFA, the new agency created by Congress this summer to regulate Fannie and Freddie.
However, there is no guarantee this takeover will work, and it comes at a potentially massive cost to taxpayers. There are more details to this event than any of us will ever know.
One reason for this post is partly informational. The second reason, is I would really like to know what other Realtors across the US think of this historic event
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