Mortgage rates drop after govt bailout

The federal bailout of mortgage giants Fannie Mae and Freddie Mac has resulted in a sharp and sudden drop in mortgage rates. Fannie Mae is short for Federal National Mortgage Association, Freddie Mac is short for Federal Home Loan Mortgage Corporation. They act as guarantors for mortgages. Since the government seized control of Fannie Mae and Freddie Mac, mortgage rates have dropped sharply, but there are questions about what it means for the housing slump. The average rate on a 30-year fixed rate mortgage dropped to 5.93 percent from 6.35 percent a week ago, Freddie Mac reported Thursday. That's a five-month low.


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