Takeover Has Affected Interest Rates

Housing prices have been dropping for some time and now that the government has taken control of Freddie Mac and Fannie Mae interest rates are coming down as well.

So, is it a good time to buy a house?

"Couldn't be better," said Sandy Del Valle, branch manager/reverse mortgage specialist for Eagle Home Mortgage in Lake Placid.

The interest on a 30-year fixed rate mortgage was 6.5 percent last week before the announcement was made, Del Valle said. It was 5.87 percent Thursday. If the housing market stabilizes the interest rate might go a bit lower, she added.

Del Valle's reaction to the announcement about Freddie Mac and Fannie Mae: "huge relief."

"It was a good move; it had to happen," she said.

"They didn't have any choice," said Karen Griffin, licensed mortgage broker with access e*mortgage in Sebring.

For the buyer of a three-bedroom, two-bath home in Spring Lake, Griffin said she had secured a rate of 6.875 percent in August for a 30-year government loan. She got a rate of 6.0 percent Thursday.

"That's a big difference - $70 a month," Griffin said.

Del Valle said the telephone calls she has received from people interested in refinancing or are trying to get a mortgage for the first time are about equal.

"It's got to be better," said Lake Placid Realtor Debra Worley, who noted that it has been very difficult to get a loan. "Things will hopefully get back to a normal pace."

According to the company's Web site, Freddie Mac is the nickname for The Federal Home Loan Mortgage Corp. It was set up 38 years ago as a private company and government-sponsored enterprise by the federal government to help expand the secondary market for mortgages.

Fannie Mae is the pronunciation of the acronym for the full name of the company - Federal National Mortgage Association, its Web site said. The company was established in 1938 as part of President Franklin Roosevelt's New Deal agenda to bring liquidity to the mortgage market.