Let’s remember that both of these institutions are NOT banks. They were created by the United States government to help more Americans have the opportunity to own homes by supplying more cash to banks, which in turn, would loan more money to buyers. Both Fannie Mae and Freddie Mac play a critical role in keeping an orderly flow of money available in our countries mortgage market.
In my opinion, if any of these two were to fall apart, it would send our already weakening economy into greater distress. It would effect not just one bank, but financial institutions all over our country. It would be a complete disaster for our fragile housing market.
What is also worth mentioning is this “BAILOUT” has been granted only if it’s necessary.
Last week the Federal Chairman spoke about how the regulator of Fannie Mae/ Freddie Mac and the Federal Housing Enterprise Oversight Committee have both found that the two companies are adequately capitalized.
I do believe something is in store for both of these companies, but only time will tell. We might not see a bailout, but I wouldn’t be shocked to see the government step in to nationalize both of these mortgage giants.