Fannie Mae (FNMA)

[Ripcord01]

There is more positive news in this story then you might realize.

You see there are many hard working people who had jobs.. who were decent credit risks.. who lost their jobs.. then lost their home through default... bankruptcy etc. There are literally tens of millions of people in this country who are in this position.

The jobs situation is turning in this country and people are getting back to work. Yet these people because of one or two bad credit marks on their report are unable to buy a home even though they can now afford to do so.

When the regulators came in and tightened the lending requirements they basically made it all but impossible for a great majority of people to get a home loan.

They made the mortgage lending rules so tight that only those with almost no blemishes on their records could get a loan. The regulators came in and have gone to town on banks.

So loosening the lending requirements a bit is in order.

So why is this good news? This means more loans will be made. More loans equals more profits for Fannie Mae and Freddie Mac. More profits means that there will be more pressure to end the conservatorship of Fannie and Freddie.

Why? Well the main argument that the conservator has been using is that FnF are both are not stable and the housing market is still weak and sickly. Profits nullify that argument.

If more people are eligible to get a home loan then there will be more loans being made.