Fannie Mae and Freddie Mac – what does it mean to America?September 8, 2008
I am going to make this very simple. It is absolutely essential that the Federal Government bailout and help to support Fannie Mae & Freddie Mac in order to restore a semblance of order and reverse the chaos that is currently overtaking our lending institutions.
Fannie Mae’s vision statement reads: “Fannie Mae’s role is to serve America’s housing market. We don’t lend money to home buyers but we do work with lender partners to make affordable financing available for people who are ready to buy a home. We want buyers to find a home and a mortgage they can afford over the long term”.
In our current market, we have too many lenders who do not have sufficient reserves or sufficient investors to fund the purchase of homes throughout the United States. This is critical. I have said it before and it bears repeating – AS THE HOUSING MARKET GOES…SO GOES THE ECONOMY.
Every American should be thrilled that finally, our governmental representatives recognize that they must actively invest in these two entities to stop the insanity. Their involvement will help to fund home purchases, refinance horrendous loans and yes…bail out some borrowers prior to foreclosure. It will also stimulate the economy, reduce the inventory of homes on the market, help neighborhood values stabilize, help people avoid foreclosure, and keep our economy moving in the right direction.
In addition, there is a direct correlation between the health of the housing market and the secondary market of home related purchases, i.e. furniture, lawn companies, pool businesses, contractors, and wood manufacturing…just to name a few. Many businesses count on homes being sold AND FUNDED and this is a tremendous shot in the arm for the recovery of our economy.
Now that’s a Good Thing!