There’s been quite a few stories this evening about the Fannie Mae/Freddie Mac Takeover(Socialization) this evening.  The first question on many people’s minds is: What Does This Mean To Me?

I’m not going to muse on the repercussions of holding their stock (ask the wall street analysts, but it doesn’t look good), but I do want to look at what this means for ordinary folk like you and I that may have a mortgage backed by the lending giants.

You see, the purpose here is to PREVENT Fannie and Freddie from going under.  They’ve lost over 3 billion dollars in the last 3 months,  and the Government has stated they would step in to financially back them in order to prevent failure.

If the Government steps in as expected, first and foremost, the government will be financially insuring the losses here (This may add a billion or 3 to the national debt, but hey, who’s counting?).

If you’ve got a note with them now, this is designed to protect you.  It will ensure that they remain solvent enough to operate.  But what about people looking to possibly get a note through Fannie or Freddie?  Well, this might be the biggest (perhaps only) winner out of the whole deal, and here’s why:

Government control over these entities is going to ensure, without a doubt, their financial solvency.  Government regulation will likely allow mortgage rates to remain lower than they would be if the groups financial stability remained threatened.

This could become a great step in helping the housing market recover, but it’s going to come at the expense of ALL taxpayers, and the bill is certain to be in the Billions.  If you’re getting ready to purchase a home, keep your eye on what happens to the mortgage rates next week, and be ready to lock in if the rate takes a dip!

~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Southern Maryland Real Estate Blog

The developers are likely to try and pass THEIR extra cost onto you, and it doesn’t make sense to pay more money for a gain that you cannot directly enjoy or change.  Working with a Realtor can save you a lot of time and headache when buying new construction, it doesn’t cost you a thing, and you have the assurance of knowing that someone is there to look out for YOUR best interests, not the builders.