Saturday, November 8, 2008

What Are Fannie and Freddie For?

News this morning of an upcoming drop in the maximum loan Fannie and Freddie will buy. The high end used to be $729,950, and now it will be $625,500.

Let's remember...these agencies were started to help create a mortgage market that would enable more people to buy homes, presumably more people at the middle and lower economic slices of our economy. It is hard to understand why these quasi-federal agencies would involve themselves in any transaction above say, $300,000. Move out of that range, and their are plenty of pigs ready to suckle.

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