Detroit Free Press (09/09/08); Gallagher, John
The federal government has prevented the collapse of Fannie Mae and Freddie Mac by bailing out the mortgage finance giants over the weekend, say industry observers. Allowing Fannie Mae and Freddie Mac to fail would have worsened the problems in the housing market, including slow sales, falling home prices and soaring foreclosures, according to Dana Johnson, chief economist for Dallas-based Comerica. Mortgage rates have already fallen by about a quarter of a percentage point, but terms for other mortgage products, such as home equity loans, are tightening. Still, liquidity from the government could eventually improve the credit situation.
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