Charlotte Mortgages

 What effect will the Fannie Mae / Freddie Mac issue have on the Charlotte mortgage market? 

First lets take a look at what has happened.  Fannie Mae and Freddie Mac are private companies that turn mortgage loans into bonds that are sold to investors.  Just like you can buy a U.S. Treasury Bond that is backed by the U.S. government, you can buy a mortgage-backed bond that is guaranteed by Fannie Mae or Freddie Mac.  They make money by charging for that guarantee.  Needless to say, the rapid increase in foreclsoures has cost them both big… billions big!

In steps Uncle Sam.  Over the weekend the U.S. Treausry and the Federal Reserve stepped up to help out.   They extended Fannie and Freddie to option of borrowing more money “if needed” at a very low rate, and even said the treasury would buy stock if required.  In effect, we now have 2 private companies that guarantee mortgage bonds that are now backed themselves by the United States of America. 

This new backing had immediate effects.  This morning there was an auction held for $3 Billion of Freddie Mac Bonds… they sold like hot cakes!  Having Uncle Sam’s backing means these bonds are almost risk free and investors like low risk! 

There are 2 primary issues at play here:

#1.  Is there enough confidence in Fannie and Freddie for them to conduct business.

#2.  Can they make a profit doing it?

Well, the government backing has solved problem #1.  People now feel more confident than ever to invest their money in Fannie or Freddie guaranteed bonds. 

The stock prices are probably going to be a little shaky for sometime, but the impact for charlotte mortgage consumers is good.  This should be good for rates in the short term because it helps the market bond market which is what determines our interest rates.  It also means that conventional loans aren’t going anywhere for the moment. 

Myers Park Mortgage is a HUD approved lender that offers FHA and VA (Veteran) loans, conventional and Jumbo loans for Charlotte area real estate.  We lend in NC, SC, TN, VA, GA, and IN, but specialize in the Charlotte Metro. (Lake Norman, Concord, Harrisburg, Matthews, Mint Hill, Pineville, Monroe, Fort Mill, Lake Wylie, Gastonia)

Call today to apply at 980-721-7478 or APPLY ONLINE.

Tags: Charlotte Mortgage, Fannie Mae, Freddie Mac, mortgage bonds