September 8, 2008 6:25 PM
- Text
The Notebook: Taking Over Fannie And Freddie
It's an unusual move, but the government's getting into the mortgage business. It will pump as much as $100 billion into each Fannie Mae and Freddie Mac, companies that together own or guarantee half the nation's mortgage balance.
Video: It should be good news for the economy. It will likely force down mortgage rates over the next few weeks. That could bring out more home buyers and help prop up sagging prices.
But while it may keep things from getting worse, it does not solve the foreclosure mess – doing nothing for people who have already missed payments. Their credit is shot, and getting a new loan won't be any easier.
This is a tough economic cycle for many of us and the housing crisis is just part of it. We're also struggling with inflation, rising unemployment and weak consumer confidence. This is a good step, but it will be a while before our economy is back on both feet.
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