It was not really difficult to find certain Wall Street skeptics last September 8, which marked the day right after the takeover of the federal government of the mortgage giants by the name of Fannie Mae and Freddie Mac. It is quite easy to confirm that there are some investors who received reassurance by some of the bolder and riskier moves. They truly believe that it will soon hasten towards the tail end of the financial crisis that has been happening all year long. There is the stock market as well as financial stocks, in particular, that has been moving higher since September 8. This was of course not alongside the likes of Fannie and Freddie, which had plunged to around a little below a dollar. However, there is a full range of problems that have been hanging over the head of the American economy, especially when it comes to issues such as housing and mortgage markets.

Scared Silly

A lot of analysts had made reactions regarding the upgrades of their personal views on such financial firms like Goldman Sachs including some regional banks. Of course, by contrast there are a lot of investors like the Bear Stearns collapse that occurred in March, right at the time when the Federal reserve had tried to ease off into the credit crunch. This was done by coming up with liquidity to most investment banks. The actions of the federal government, of course, were initially met along with the approval of Wall Street. However, the rally of the stock market had been short lived and by around summer these stocks had tumbled down. The best that may actually be said regarding the action on Fannie-Freddie is that a big question is answered – that the federal government will never allow such crucial mortgage financiers to actually fail and eventually cripple the housing and mortgage market in the United States.

The Solution – Lower Rates for Mortgages?

And of course, the takeover would eventually make life better for most ordinary Americans, especially if the new guarantees made by the government would do a lot to lower the mortgage rates. And in order to make things a lot easier for homeowners so they can refinance their mortgages as well as let new home buyers penetrate the housing market. Then again, what has had a lot of investors worrying their heads off is the fact that the banks may even be quite reluctant to actually approve the lending that was requested. It may be a bit hard for the federal government to actually erase the lessons that were made during the past year, and that many bankers have been victims of some bad loans. Because of this, they have decided to make drastic lending standards which will make it hard for a lot of Americans to actually qualify for the mortgage.

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