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What Is the Information on Fannie and Freddie, and Why Is the Change Important to the Housing Market

In: Business and Management

Submitted By qzhou
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What is the information on Fannie and Freddie, and why is the change important to the housing market

First of all, to fully understand the importance of the two companies and their aid, you must thank them how to help the millions of people to become the owner.

Fannie Mae and Freddie Mac do not lend money directly to individuals. Rather, they are meant to establish a regular flow of funds banks actual payment of housing loans. Buy lenders from mortgage lenders - commercial banks, savings institutions and credit unions - which in turn allows these institutions to make additional home loans.
Fannie mae was established in 1938 during the administration of President franklin d. Roosevelt when millions of families can't afford to buy a home. Freddie MAC in 32 years later. In 2007, the two companies announced the total loss of less than $5.2 billion, according to a report to congress. Before that, they didn't released since 1982, the total losses. In order to prevent crushing blow the real estate market, the federal government rescued company. Fannie mae and Freddie MAC, the financial problem does not pose a risk, if you do not intend to sell your home quickly or you don't want to refinance. That's because you don't have to worry about mortgage rates. And does not affect your current mortgage, so you should continue to pay agreement.

My concern is that we really do not know what the market will Fannie Mae and Freddie Mac did not do. We know that there are too many countries in the region, the working class can not afford. If the price of mortgage loans increased significantly in Fannie Mae and Freddie Mac in the case, we may return to a time when the only economically wealthy families can afford.

With homeownership such a key part of the person's net worth, I do not know that we can afford to buy Fannie Mae and Freddie Mac's role in the housing market, in order to eliminate or suspected.…...

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