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8 September 2008

Fannie and Freddie – The Shoes Keep Dropping…

Posted by Sherry Chris

In a meeting this morning, Alex Perriello eloquently stated, “I feel like I am in Imelda Marcos’ closet – the shoes just keep dropping.” What he was referring to of course was the breaking news yesterday morning that the federal government had taken over control of Fannie Mae and Freddie Mac, the government sponsored enterprises that many say hold the key to America’s mortgage liquidity. The announcement was hot on the heels of the GMAC announcement late last week of the closure of all retail mortgage offices and the layoff of some 5,000 employees.

The Fannie and Freddie announcement seems to have been seen as a positive move as the markets reacted favorably, and some think the takeover will bring down the cost of borrowing which could help the challenged housing market. However, this type of takeover can’t happen without a ripple effect of some sort.  For those of us who like to see the humor in things, the big announcement yesterday only created a blip in the ongoing news feed about the life and times of Sarah Palin. I guess this is one piece of news that won’t make the cover of People Magazine.

As we hunker down for what is likely going be a challenging Fall and Winter in the business, I feel a sense of relief that I am supported by the team at Realogy.

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