Henry “The Destroyer” Paulson
Well it finally happened. The CEO’s of Fannie May and Freddie Mac have been ousted, and both of the company’s have been put entirely under government ‘conservatorship’. This by default makes the federal government the de-facto largest mortgage lending in the country. To see what Fannie and Freddy do, click Here
This all went down Sunday under the direction of the secretary of treasury. Henry Paulson. Now in my opinion this is a good news bad news situation
The Good: Mortgage values will remain where they are, or head lower. Credit will remain available for those that are actually qualified. The company’s will continue to do business, and the housing market will be safe. The financial stocks are up big today.
The Bad: The Federal Government is lending out billions and billion of dollars. Fannie and Freddy stock drop 80% over night.
If these companies had collapsed we would have seen some very serious financial repercussions (in theory). Mortgage rates could double, which would drop the hypothetical A-bomb on anyone trying to sell there home, or get a mortgage. There is nothing like double of the price of something to have consumers no want to buy it.
