The US Treasury Department’s plan to increase the two mortgage giants’ lines of credit and stabilize their liquidity is important to consumers looking for mortgage financing or refinancing. As long as Fannie and Freddie are able to purchase loans, banks and other mortgage lenders will be able to continue to offer mortgages to their clients  with reasonable terms and at relatively affordable rates.

According to MarketWatch, solid borrowers with good credit, reliable income, and substantial equity or down payments will be able to get loans with no problem anyway. However, Fannie Mae and Freddie Mac keep additional money in the mortgage lending pool, which allows more consumers to be able to obtain real estate financing at decent rates. This additional liquidity is needed to speed up the recovery of real estate markets in troubled parts of the country, dry up the oversupply of housing, get more first-time home buyers into the market, and allow homeowners to once again build equity in their property.

Tags: consumers, fannie mae, freddie mac, US Treasury

This entry was posted on Wednesday, July 16th, 2008 at 3:04 pm and is filed under Daily Pick. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.