Comments on: Dotzour’s Take on Freddie and Fannie Collapse http://crosslandteam.com/blog/2008/07/11/dotzours-take-on-freddie-and-fannie-collapse/ Austin Real Estate Blog Wed, 08 Feb 2012 19:40:44 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Nate http://crosslandteam.com/blog/2008/07/11/dotzours-take-on-freddie-and-fannie-collapse/#comment-18296 Nate Sun, 13 Jul 2008 14:02:54 +0000 http://crosslandteam.com/?p=473#comment-18296 Not a chance the 2 companies will be nationalized. These 2 have 7 trillion in MBS outstanding and the government can not and will not take on the default risk of a the US home owner. The dollar would tank and the US defict would instantly increase by the loss reserves required on all the debt out standing. FNM and FRE have kept mortgage rates artificially low for the last 30 years and as these to companies slowly sink into oblivion mortgage rates will climb and assess to mortgages will continue to be cumbersome for a long while. Obviously the gov can't just watch the two go down the tubes, but I have no idea what scheme they will use to prop up FNM and FRE. Probably cash infusions until things settle down. Not a chance the 2 companies will be nationalized. These 2 have 7 trillion in MBS outstanding and the government can not and will not take on the default risk of a the US home owner. The dollar would tank and the US defict would instantly increase by the loss reserves required on all the debt out standing.

FNM and FRE have kept mortgage rates artificially low for the last 30 years and as these to companies slowly sink into oblivion mortgage rates will climb and assess to mortgages will continue to be cumbersome for a long while.

Obviously the gov can’t just watch the two go down the tubes, but I have no idea what scheme they will use to prop up FNM and FRE. Probably cash infusions until things settle down.

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