According to the AP, Treasury Secretary Timothy Geithner is set to give a major speech on Monday to outline the $700 billion rescue plan.
As a part of any bailout package we’ll see, the government will certainly make some major moves in the real estate and banking space.
Meanwhile, real estate lobbyists were pressing the government to spend billions to temporarily subsidize lower mortgage rates. They were looking to Geithner’s announcement Monday in hopes that some of the financial rescue money would be used to reduce mortgage rates and prevent foreclosures.
The Federal Reserve has been buying up mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae for a month. Before rising a bit in recent weeks, mortgage rates had plunged since the Fed announced the creation of the $500 billion program late last year . . . Geithner said the overhaul of the rescue program was aimed at improving the effort to get credit flowing again and to support the Obama stimulus plan being debated in Congress.
- What will happen to the lending environment if private lenders are forced to set rates according to government regulations?
- How will they “convince” banks to loosen credit and lend in the current environment?