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The government is spending billions of dollars to bail out the two companies responsible for most of the mortgages in this country. But what does that mean for you?
The feds are betting this should lead to lower mortgage rates, beef up home-buying demand and slow down the falling home prices in many areas of the country.
The feds say if they didn't bail out Fannie Mae and Freddie Mac, the two companies could fail, greatly affecting the country's financial markets.
Jaron Davis with the Utah Association of Realtors says they hope it will spur the housing industry, but he's cautious right now. "The government having stepped in is a little bit scary in terms of how will those underwriters of mortgage notes in the future look at our industry and look at that risk factor."
Davis says consumer confidence is key for potential home buyers.
"When that consumer confidence comes back, they are going to come in almost a wave back into the market to buy that asset, and that potentially will push us back up a little bit quicker," he said.
But Davis is a little worried about the government's bailout of Fannie and Freddie. Davis says with the backing of the federal government, mortgage lenders may take risks they wouldn't have before.
E-mail: mrichards@ksl.com
