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 September 09, 2008

Good News for Fannie Mae and Freddie Mac Bailout
Here are some of the good things to come from the recent government takeover of Fannie Mae and Freddie Mac. For one the government will back bond payments, which will give investors confidence to purchase mortgage bonds.
Mortgage Bonds are better than they have been at anytime this year. Some will qualify for lower mortgage rates and some experts are predicting that thirty year conforming rates may be reduced by a 1/2 point.

Initially, there were expected problems with Fannie and Freddie's mortgage portfolio. However, individual institutions will receive billions to help meet what they are obligated for. This will instill confidence with investors and guarantee that failing mortgages will not be diluted.

Experts are also hinting of a possibility that the government takeover will create an alternative market for jumbo loans. As more information comes in, we will keep you posted.