Yep, the federal government has made it official: they will be producing and directing a new reality show, entitled “The Fannie Mae and Freddie Mac Show”.  Yes, after weeks of anticipation and speculation, Treasury Secretary Henry Paulson announced that the federal government had taken over mortgage giants Freddie Mac and Fannie Mae. Those interested in competing on the show need only have good credit, plenty-o-cash for a down payment, and documentable income!

But seriously folks; while it is yet to be determined the full extent that this take over will have on the housing market, this latest government action should help borrowers looking to refinance or purchase a home, as interest rates on conventional loans are expected to decrease, at least for the short term. The government bailout is aimed at making mortgages easier to obtain and afford, although it’s anybody’s guess how much relief will result as far as interest rates on 30-year fixed loans, which average around 6.5% nationally as of the writing of this blog.

According to Treasury Secretary Paulson (executive producer of the reality show), “Fannie Mae and Freddie Mac are crucial to turning the corner on housing; therefore, the primary mission of these enterprises now will be to proactively work to increase the availability of mortgage finance. Our economy and our markets will not recover until the bulk of this housing correction is behind us.”

So is this latest action going to be (another) saving grace for the housing debacle? As with many recent plans unveiled by the government, there is no telling where the mortgage and real estate market will move in the near future. For instance, if more news pops up that is perceived as negative (as it no doubt will), then the drop in interest rates could be a short term event.

Given that almost certain prediction, if you were waiting for lower interest rates to lock in on that loan, now may be the time to act.

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