What Does Mortgage Bailout Mean for Consumers?
If you’re about to buy a house, or trying to sell one, the government takeover of mortgage giants Fannie Mae and Freddie Mac may be good news. But, if you’re one of millions of homeowners behind on payments or if you now owe more than the house is worth, don’t expect the bailout to bring much relief, according to an article in The New York Times (Sept. 8).
The bailout was designed to help stabilize the housing market, push mortgage rates lower and make sure home loans remain available — at good rates — to borrowers who have good credit and a down payment, says Credit Union National Association senior economist Steve Rick. “This will ensure private investors will put up capital funds for mortgages at prices households can afford,” he said.
Depending on your situation, you may want to take action now, CUNA advises:
- Move on mortgages quickly. The reduction in rates may not last.
- Choose fixed over adjustable rates.
- Expect some movement in sales (good news for sellers).