Wednesday, July 23, 2008

Freddie Mac and Fannie Mae bill passed by the House

In a move today, which was coming for about a week or so, the House approved the new bill regarding Fannie-Mae and Freddie Mac. The bill is now being pushed to President Bush's desk by, what they are hoping, is the end of the week.

You can read the full article here:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAELTC1YJg.A&refer=home

The bill is designed so that ONLY if the two major mortgage players, Fannie Mae and Freddie Mac, begin to have "issues", then government will step in and use this bill to infuse capital and lend to the organizations. The estimated cost to the taxpayers, you and me, is roughly $25 Billion dollars.

In addition, a part of the bill would be used to help about 400,000 homeowners with sub-prime loans avoid foreclosure by being able to refinance. However, the instances of foreclosure in the U.S. is surely greater than that.

Hard to say whether the bill will have a positive impact or not. Only time will tell.

2 comments:

James said...

I am usually against government intervention in these matters. However, the situation is approaching crisis level(if not there already). Im really glad the president signed the bill into law today. Lets hope it has the desired effect.

Eric Murrietta said...

It went into law and now it becomes how we use it that will determine its effectiveness. Check out www.azmortgageguru.com for an in depth article.

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You can find great local Scottsdale, Arizona real estate information on Localism.com Eric Murrietta is a proud member of the ActiveRain Real Estate Network, a free online community to help real estate professionals grow their business.