One effect of the Fannie Mae and Freddie Mac Bailout is lower mortgage rates. On Monday, rates on 30 year fixed mortgages fell about 1/2% - not bad. The assumption behind this movement is that the government stands behind Fannie and Freddie, and will provide liquidity to mortgage lenders. More liquidity equals easier money.
Skeptics doubt that rates will stay low forever, and they argue that the long term effects will be higher rates. In 2010, Fannie and Freddie are supposed to slowly back out of the market. Unless private lenders step in, money will be harder to come by. Since private lenders are not known for turning down profits, they probably will step in.
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