Two of the largest financial institutions in the United States have been rescued by the federal government. Both Freddie Mac and Fannie Mae were taken over on Sunday by an order through the Bush Administration, which placed the two companies in a conservatorship, they replaced their CEO’s and directors, and have made plans to put billions of dollars into the company in order to keep them afloat.

There are several positive outcomes which can come from the take over. First, the market may calm offering a little stability, and as a result help the U.S. Economy. It will also allow more opportunities for loan modifications to homeowners who have fallen behind on their payments. The interest rates are also expected to decrease slightly, which will hopefully encourage buyers to purchase homes.

With any luck this takeover will offer some cushion to the falling housing market. As Freddie and Fannie together owned or guaranteed more than $5 trillion in mortgages. This is almost half of all mortgages in the country.

This entry was posted on Monday, September 8th, 2008 at 4:42 pm and is filed under Foreclosure. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.