Brue Berkowitz: Without Fannie and Freddie, goodbye fixed rate mortgagesVW Staff
Without Fannie and Freddie, would we have to say goodbye to fixed rate mortgages? via Bruce Berkowitz
Two articles published today in the Miami Herald illustrate how the rulings in Fairholme’s lawsuits against the government (and the other cases pending throughout the country) seeking to invalidate the Net Worth Sweep might hit close to home for Americans.
Fannie Mae and Freddie Mac are pillars of the housing market. The articles explain how ordinary Americans will likely be the ones who suffer the most if the companies are not prudently recapitalized and rehabilitated. Without the liquidity that both companies provide to our housing market, the availability of the 30-year fixed rate mortgage – by far the most popular mortgage product in America – is in serious jeopardy.
Some experts have noted that “what’s really at risk is American home ownership.” Today, the homeownership rate is at its lowest level in over five decades, and “roughly four in five owner-occupied homes – about 80 percent – are financed with fixed-rate 30-year mortgages.” Eliminating Fannie and Freddie – as some in Washington have proposed – will only worsen America’s housing crisis with dire consequences for developers, existing homeowners, and prospective home buyers alike.
To read more, please see the following articles: