The American Giants
The American Government has decided to intervene and rescue the giants of the mortgage world, Fannie Mae – (Federal National Mortgage Association) and Freddie Mac – (Federal Home Loan Mortgage Corporation).
Britain believes this is a sign of better things to come. An injection of £110 million will ensure that the monies invested in Fannie Mae, and Freddie Mac will keep the banking ‘Cull’ out of the UK Market.
The UK Banks as debtors have had a free US government pass, their debts have effectively been underwritten. However there has been no mention of the stock holders.
The US Government has announced that they will be nationalizing the two institutions in order to avoid major financial problems, where their bankruptcy could have triggered a massive collapse economically throughout the world.
Mortgage experts in the UK are hopeful that this move will bring back some of the confidence to the UK housing market and could lead to a greater availability of mortgages, but with the constant threat of US economy teetering on the edge of the worst housing market since the Great Depression of the 1930’s we can only wait and see.
(Tuesday, September 9, 2008)