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Old 07-24-2008, 08:29 AM
 
248 posts, read 1,345,621 times
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Yesturday the president approved helping Fannie Mae and Freddie Mac with $300Billion.What does this do to the new home mortgage rate?Does it increase or decrease?My home will be built by the end of august and was wondering when will be a good time to lock down that fixed interest rate.Can someone advice me on this?thanks
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Old 07-24-2008, 08:50 AM
 
27,453 posts, read 44,947,050 times
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my take on this is that rates are going up--banks need to make money to add to profit line--even if they are getting cheap money from the Fed they will tack on their profit to it

and regarding Fanny Mae's bailout--why would you give a mega million $$$ corporation money when they cannot keep track of their books
that is just throwing more money down a hole...Bush is an idiot and Congress is too for doing that--they are so afraid that there is a can of worms in there they DON"T want to come out that they are putting money into it to avoid dealing with the real problem...
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Old 07-24-2008, 09:12 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,094,482 times
Reputation: 1007
It 'should' drive the rates lower because now there is more money to lend.
The reason rates were going higher is due to the lack of investors willing to place their monies in mortgage backed securities.

Everyone calls Bush an idiot, but they dont realize that he can only say 'yes' or 'no' to a bill. Those who are running Congress (democrats) are the ones that are pushing this bill.

Quote:
Originally Posted by loves2read View Post
my take on this is that rates are going up--banks need to make money to add to profit line--even if they are getting cheap money from the Fed they will tack on their profit to it

and regarding Fanny Mae's bailout--why would you give a mega million $$$ corporation money when they cannot keep track of their books
that is just throwing more money down a hole...Bush is an idiot and Congress is too for doing that--they are so afraid that there is a can of worms in there they DON"T want to come out that they are putting money into it to avoid dealing with the real problem...
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Old 07-24-2008, 09:25 AM
 
4,542 posts, read 11,544,610 times
Reputation: 3063
Quote:
Originally Posted by jerzstyle00 View Post
Yesturday the president approved helping Fannie Mae and Freddie Mac with $300Billion.What does this do to the new home mortgage rate?Does it increase or decrease?My home will be built by the end of august and was wondering when will be a good time to lock down that fixed interest rate.Can someone advice me on this?thanks
I would say it does not affect the interest rate pricing directly, but rather keeps Freddie/Fannie in business.
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Old 07-24-2008, 07:56 PM
 
Location: Southeast Georgia
65 posts, read 215,875 times
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Despite this help, both Fannie and Freddie's stock fell sharply today. Fannie Mae fell to $12.02, dropping $2.98 (20%) and Freddie Mac fell to $8.81, dropping $1.99 (18%).
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Old 07-25-2008, 12:56 AM
 
Location: Cary, NC
1,036 posts, read 3,627,489 times
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I dont think its going to change rates much at all. Yes it means Fannie/Freddie will stay in business and the increased demand (even artifical demand by the Treasury) should decrease rates... but the decrease in demand from the public and large investors for stocks in these banks and mortgage backed securities will balance that out.

Banks will keep raising guidelines, fees and rates to ensure profitability.
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