Fannie Mae and Freddie Mac bailout

The Fannie Mae and Freddie Mac bailout is a result of the sub prime mortgage crisis. Many have hard feelings about the government having to bail out these two giants, but the truth is that it had to be done to prevent the U.S. housing slump from becoming any worse. When the news hit late Friday, the media as usual was painting a grim picture. The truth is this bail out has actually turned out to be quite a blessing in disguise. Due to the government stepping in it has made investors feel far more secure in investing in home mortgages. This in turn has dropped interest rates significantly. When I say significantly I mean by half a percentage point. Today fixed rates on a 30 year mortgage are at 5.625%. We have not seen them below 6% for quite some time now. Most analysts say we can expect to see rates in this range for the next year or so, but have no idea what the long term effects will be with the government now involved. We do know that these low interest rates will bring more buyers in the market and aid in the recovery of the housing slump. Colorado was hit early in the housing crisis and has been showing signs of recovery. This may be the last little boost we need to get back onto our feet again.

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