Wichita Home Loans Aided By Government Takeover

Sept. 9, 2008 - PRLog -- After many meetings over the last month with Federal Reserve officials, bankers, and lawyers, Treasury Secretary Henry Paulsen made the decision to place Freddie Mac and Fannie Mae into a conservatorship.  In this setup, the companies’ regulator, the Federal Housing Finance Agency (FHFA), will run the operations of the two mortgage giants.
    Congress created Fannie Mae and Freddie Mac to expand home ownership and to provide market stability.  Fannie Mae was established in 1938 as part of President Franklin Roosevelt’s New Deal.  When the Vietnam War pressured the federal budget in 1968, Fannie Mae was split from the government, and shares in the company were sold to the public.  Freddie Mac was created in 1970 to provide competition for Fannie Mae. The two businesses made money through purchasing mortgages from banks, funding their purchases with low-cost debt, and guaranteeing home loan securities.  
    The federal takeover translates into possible lower mortgage rates for Wichita home loans, as well as greater availability of credit.  With the government stepping in to guarantee Wichita mortgages and home loans across the country, the cost of a 30 year fixed rate mortgage could drop by 1 percentage point from the current rate of 6.39%.
    A Wichita home loan is still very obtainable, even though borrowers posing more risks will continue to pay higher fees.  Because investors were not willing to put more money into the struggling companies unless the Treasury stabilized them with enough funds, interest rates have been high.  Fannie Mae and Freddie Mac had also increased fees in the hopes of shoring up their finances.  With the risks now being minimized by the government takeover, interest rates for Wichita mortgages should decrease.
    Stringent standards will stay in place at least for the next few weeks, but in the long run, the government bailout is expected to make Wichita home loans more affordable and easier to obtain.
   For more information about obtaining a Wichita Home Loan go to http://www.wichitamortgageplace.com

# # #

Wichita Mortgage Place is a residential home loan lender. Specializing in the wichita mortgage market. Wichita Mortgage Place offers home loan financing for new home purchases and existing home refinances.