Irvine Real Estate link, CA – Why did it happen to Freddie Mac & Fannie Mae?

by Robert Mack on September 14, 2008

in Irvine Real Estate

Financial giants, Fannie Mae and Freddie Mac, were mortgage icons as long as anyone can remember. Certainly they existed even before I was born. They grew and grew to a proportion so scary that for any reason if they toppled the effects on the overall economy would be almost irreparable for many years to come. No single entity with close ties to the government should be given the opportunity of such growth for the simple reason just stated above.

According to The Washington Post: Sunday, September 14, 2008, “…the federal government seized control of the two companies to protect the very mortgage market they were created to lubricate. The cost to taxpayers could run into the tens of billions of dollars.”

In not so distant past the F&F had many financial blunders that either went un-noticed or serious concerns fell on deaf ears. They made risky loans. Many borrowers defaulted on their loans. The Washington Post goes on to say: “…finally, as the credit crisis escalated, Congress passed a bill two months ago establishing a tough, new regulator for the companies. It was too late.

Now, we’ll wait and see how the F&F is handled. My guess is when things settle and the market bounces back, hopefully soon, and everyone is happy and content, because the money flow is abundant and no one is concerned about the status of the economy, and the market is booming, while some executives behind giant financial institutions begin their finger-poking actions for personal gains, effecting the economy, then and only then will we wake up to a situation like what we are having today. And the never-ending cycle continues. Will it ever stop? I wonder!

Irvine real estate, like any other, was not immune from this bombshell that was brewing almost a decade ago, and now we are reaping its rotten fruit, today.

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.

The Mack Team
Robert & Tania Mack

Century21 Professionals

Irvine, Orange County, California.

http://www.irvinerealestatelink.com

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