Unconventional Mortgages and Loans

This past Sunday September 7th, the federal government took over the two most important and well-known finance companies in the nation. Freddie Mac and Fannie Mae have been official bailed out by the government in the wake of the crippling subprime mortgage crisis. The takeover is aimed at mitigating damages in this horrific mortgage dilemma.

Predictions as to the possible effects of the bailout are wide and varied. CNN reports that many small banks are being crushed, due to the fact that their stakes in Fannie and Freddie are now completely worthless. Most experts agree that taxpayers will be taking the brunt of the cost for this takeover. CNN also reports that Fannie and Freddie employees themselves are suffering immensely, also due to the fact that the companys’ stocks are now all but completely worthless.

The news is not all dire though. While most lenders will almost certainly be risk-averse to the point of paranoia for months and years to come, the government assistance may encourage some lenders to begin to open up their doors once again. Only time will tell…