Freddie Mac - Fannie Mae Takeover--WHAT DOES IT MEAN FOR ME?

Treasury Department Takes Over Freddie Mac and Fannie Mae! What does that mean for me?

Treasury Secretary Henry Paulson announced the takeover of Freddie Mac and Fannie Mae on Sunday, September 7, 2008. The two mortgage giants were the primary purchasers of mortgages on the secondary market and the major influencers of loan guidelines and interest rates across the country.

Pressure from foreign and domestic investors helped prompt the government's move. The Federal Housing Finance Agency, or FHFA, will have management control of these organizations. They had been operating under that agencies regulation.

This is a clear indication that the housing crisis in this country has had a major impact on an international scale. Buyers, sellers and borrowers are not the only ones impacted.

A recent Wall Street Journal article indicated that analysts expect that the average 30-year mortgage rate could come down a quarter to a half of a percentage point in the coming weeks.

Pundits tell us to expect a tightening of loan guidelines in the near future. Qualified borrowers will be able to enjoy a lower cost of funds. However, the pool of qualified borrowers is likely to be smaller.

100% financing is almost a thing of the past and second loans are very difficult to obtain. However, the market is nothing if not resilient. Investors will find a way. The only question is how long it will take them.

This sudden drop in interest rates coupled with the significant drop in housing prices makes this an excellent time to buy. Those who wait for better market conditions are likely to miss out on the opportunities extant.

If you, a friend or family member have been thinking of purchasing a home or other property, now is the time. Let's start the search