I found the article below over at The Phoenix Real Estate Guy, and thought it was a great explanation of what the government takeover of Fannie Mae and Freddie Mac (neither of which should  be confused with my great aunt Ida Mae) could mean for mortgage rates. As the title says, it’s only 265 words long, so why not take 5 minutes and go edumacate yourself?

Explaining What The Government’s Takeover Of Fannie Mae and Freddie Mac Means To Mortgage Rates (In 265 Words)

This week’s poll called while you were out. It said to tell you to come on over and vote already.

This week’s topic is today’s announcement that the federal government has taken control of mortgage giants Fannie Mae and Freddie Mac.  The question is no longer whether a government bailout was necessary. As Treasury Secretary Paulson himself said in his announcement of the takeover:

Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe. This turmoil would directly and negatively impact household wealth: from family budgets, to home values, to savings for college and retirement. A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance. And a failure would be harmful to economic growth and job creation.

No, now there are lots of new questions and one of them is how this major move will affect the current, ailing housing market. Several people, including Paulson, say that it will help, since government regulation will ease investor fears, which will ultimately result in lower interest rates. Others say it won’t help at all, since the housing market won’t recover until we get rid of excess inventory and prices finally bottom out. What do you think? Will it help, hurt or not matter much at all? Cast your vote and let your voice be heard.

Major lending institutions may come and go, but All Around KTown will always be here to provide you with the best and most up-to-date information on the Knoxville (and national) real estate market. Don’t miss out - subscribe to All Around KTown in a feed reader or by email today!

photo credit: Shiny Things