Fannie & Freddie Bailout

But it looks like the pending merger of Fannie and Freddie have indeed achieved the desired affect at least in the short term. Our in-house finance officer rushed back from the MAR Conference to lock in some loans. Having a rapid 1.25% reduction in the interest rate makes people jump off of the fence. HELOC rates go down as well.

Every time this happens we see properties everywhere miraculously go under contract without fail. So yes, it can't hurt.

But chicken little (CNN Money) is all about doom and gloom. And anyone with half a brain knows how rosey the picture would be if we had the other party in the White House.

So unless you look real hard for the 'good' news, you'll never hear it.

The Market Is What You Make It!

Now who wants lemonade?     ;)

Hi Jay, my take is this: If Fannie/Freddie were allowed to collapse you and I would have a lot of more important things to deal with, rather than going to work each day and trying to make a living.  Our country operates on debt that is funded by the Chinese, Japanese, etc.  If our government did not step in, our source of funds to operate our country would have dried up, the housing market would have gone into a free-fall, and the consumer would have gone away.  The consumer is the backbone of our economy and we need them to stay as strong as possible.  I think when the government stepping in is looked at from a macro standpoint, it was not a question of "if," but "when."  We now know the answer to that question...  That's my take, thanks for your insights and making me type this morning! Regards...

Well, I agree with you that Govt cannot solve all of our problems and should not be heavilly involved in the private sector in most cases.  However, this was not a political move.  It had to be done.  If the Govt did not get involved, then we may well have seen a "shutdown" in conventional mortgages.  When PIMCO states that they will not buy any more mortgage bonds, this is an unbelievalby dire situation.  So, no, the Govt wont necessarily "solve" the problem, but it will help as our market stabilizes.   The market WILL come back around, but our industry needed this support (like it or not).  If Fannie and Freddie failed the ripple effects would have been devastaing. 

The Govt bailed out the S and L's then when things rebounded, they gradually got out of that game.  I would say that is a success story.  Hopefully, we will see some of the same results here.

Also, I agree with your comments on irresponsible journalism.  What she said is absolutely false!