On Sunday morning the new GSE regulatory agency placed congressionally chartered mortgage giants Fannie Mae and Freddie Mac into separate conservatorships, as the government committed $100 billion to each while removing their CEOs and laying the groundwork for a radical and historic restructuring of the entire U.S. mortgage market.
This is going to be a very good thing for the mortgage market and in turn for the Real Estate market overall.
The funding of these two companies opens up much needed liquidity for lenders. This liquidity will ease some lending guidelines, decrease rates, and eliminate the financial sector's worry about Fannie and Freddie failing. The Bond market, which controls interest rates and the strength of the US Dollar, will become a place where investors will place their money due to the FDIC basically guarantying those investments. The dollar will also get much stronger due to the money pouring into bonds.
What does all this mean to the real estate markets.
1) There will be lower interest rates to help boost sales.
2) More borrowers will qualify for loans.
3) The dollar will be stronger, which will help the economy.
4) More people purchasing homes means we all increase our businesses.
Joe Phillips
AMR manager
386-615-7977
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