Now that Fannie Mae and Freddie Mac are wards of the government what's the future of housing finance in America? That's the obvious and big question -- one that will be debated over the next few months.
But one thing seems certain: the home ownership rate in America is destined to fall -- maybe to 60% from the current rate of 68%. Let's face it, the days of easy mortgage money via 'Liar Loans' and payment option ARMs are over.
Meanwhile, the stock prices of the two publicly traded GSEs plunged to "near worthless" in trading Monday morning. Think of all those pension and mutual funds that owned shares in the two.
The government, of course, now owns 80% of Fannie and Freddie -- along with their $5.2 trillion in obligations. What do you think is going to happen now?!?!?!?!
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