As we enjoyed our weekend, wondering if Brady will make it back for the season and watching the Bears take out the Superbowl champion Colts; and we enjoyed one of the last weekends with the kids at the pool, goverment officials were busy.
And, just like we suspected, Fannie and Freddie are now mostly the property of the Federal Government. Both companies are in conservatorship, with money flowing from taxpayers to the mortgage giants to bolster them. The hope is that we will eventually be able to recoup that money and turn the companies back over to shareholders.
The government spending money, then returning to capitalism? Could happen.
There is a silver lining in all this. While taxpayers (all of us) take a hit, home buyers (some of us) will likely benefit from lower mortgage rates.
That is because mortgage rates are determined by the bond market – specifically the sale of Mortgage Backed Securities. And with the Federal Government backing these securities, investors will likely be willing to accept a slightly lesser yield, knowing that the return they receive will be safe.
I would be surprised if the volitility in mortgage rates that we have seen so far this year does not continue, though. So, if you are in the market for a home loan – whether purchasing a new home around Atlanta or refinancing, if you see a dip in rates – lock. That dip may not last the week in these circumstances.
Related posts:
