Blaine, WA (PressExposure) September 12, 2008 -- The Federal government took over Fannie Mae and Freddie Mac on September 7, 2008 in an attempt to save the nation from its current housing crisis. However, skeptics believe this takeover is unlikely to immediately help the hundreds of thousands of American homeowners facing foreclosure or about to face foreclosure.
Fannie Mae and Freddie Mac are the largest mortgage finance companies in the United States. Fannie Mae, short for the Federal National Mortgage Association, was created during the Great Depression to make mortgages more affordable. Freddie Mac, short for the Federal Home Loan Mortgage Corporation, was created in 1970 to further the secondary mortgage market and provide additional funds for new home buyers.
The takeover put Fannie Mae and Freddie Mac under the conservatorship of the Federal Housing Finance Agency (FHFA). However, this government intervention is not likely to help homeowners stop foreclosure directly; but rather indirectly by creating more buyers and potentially allowing some preforeclosure homeowners to refinance out of foreclosure.
"This effort will help some homeowners as mortgage interest rates will probably fall and some fees will be reduced therefore spurring more people to take out loans. An increase in the ability to take out a loan will hopefully increase interest in the slumping housing market and spurn more buyers to purchase the glut of real estate sitting on the market," said Dreama Lee, President of SaveMeFromForeclosure.com, LLC. "Unfortunately, we wonât see any changes for quite some time because a large portion of loans are backed by the private sector that has very tight requirements still on their lending practices. Homeowners who need to stop foreclosure within the next 90 to 120 days are really not going to get any relief from this takeover," she continued.
However, without this takeover Fannie Mae and Freddie Mac were certain to have too many foreclosed properties on their books and could have gone under, affecting both the US and international economies significantly. This bailout is estimated to potentially cost American taxpayers $25 billion. And for those who are already behind on their mortgage payments, or owe more than their homes are worth, it is doubtful that this takeover will offer any relief, at least in the near term.
"We remain optimistic that this takeover is going to help homeowners facing foreclosure. It is a first step in rectifying the current real estate crisis," said Justin Lee, CEO of SaveMeFromForeclosure.com, LLC. He continued "If the takeover goes as planned, hopefully it will stabilize the housing market and stop the falling home prices."
For additional information, Contact: Penny Fletcher SaveMeFromForeclosure.com, LLC 1685 H. ST., #679 Blaine, WA 98230 Ph: 360-306-5933 E-Mail: penny@SaveMeFromForeclosure.com http://www.SaveMeFromForeclosure.com
SaveMeFromForeclosure.com specializes in helping clients who have fallen behind on their mortgage payments or are facing foreclosure. The company has local representatives across North America who can offer comprehensive solutions to homeowners to stop foreclosure.