The market could have been on the verge of a dramatic collapse starting on Monday. Bold moves by the government over the weekend, could provide a catalyst towards rebuilding the credit markets and fixing the housing mess. Late on Friday, one of the nations larger regional banks, Indymac bankcorp was shut down and taken over by the FDIC. The company was not able to raise capital and saw depositors pull funds at a rapid pace, forcing the drastic actions. The company was one of the nations largest independent mortgage lenders and this move would have certainly jarred the finance markets on Monday. The markets have increasingly been betting against the survival of Fannie Mae and Freddie Mac, the two largest agency lenders in the country. These companies provide a critical role in helping to ensure that home ownership is available for all home owners. the companies have over five trillion in combined loans for the U.S. housing market and any hint of their failure would have drastic consequences on the world economy. This weekend the U.S. government announced a series of moves designed at bolstering the companies financial position and providing additional confidence that these companies will survive. The market could use this as a catalyst to rebound and more mortgage lenders could see an improvement with mortgage liquidity in the secondary markets.

7-14-2008 ©LowRateMortgage.com

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