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Freddie Mac and Fannie Mae To Be Shut Down? Posted: 11 Feb 2011 07:48 AM PST Today the Obama administration outlined 3 different scenario’s that would shut down Freddie Mac and Fannie Mae as the backstops of the mortgage markets.
The one unifying factor of all these plans is that interest rates would rise and the banking system would be expected to play a much bigger role in the housing industry. That is not all bad. Sure it will be a shock to the system, but the federalization of the housing market is not a great thing for the industry. Instead, the ability of housing market and the banking sector to find it’s equilibrium is the most important factor in a healthy real estate marketplace. And never forget, banks need to make their money. So loans will be harder to get and they will be more expensive, but they also will not be subsidized by your tax money. Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published. Freddie Mac and Fannie Mae To Be Shut Down? Related posts:
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Mortgage Rates Rise On Inflation Risks Posted: 11 Feb 2011 07:04 AM PST
Low interest rates. Now with indications that the economy is recovering and inflation is increasing, those interest rates are starting to rise. Quickly. For the rest of the economy this is green shoot behavior and a welcome site, but for the housing sector this is the squeeze that could push housing prices into the double dip. Instead of recovering with the rest of the country the rising interest rates, essentially increasing the cost of home ownership, could push prices down and slow sales. If the interest cost of a mortgage rises the cost of ownership rises. If the cost of ownership rises, the price that a potential buyer can pay will decrease. The only good thing that will come out of rising interest rates is that banks may start home lending again instead of funneling all the activity through the FHA.
Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published. Mortgage Rates Rise On Inflation Risks Related posts:
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