Freddie Mac stayed afloat during troubled times due to the significant amount of bailout funding the company received from the U.S. government. Taxpayers helped to finance the bailout and Freddie Mac continues to move forward and the housing market continues to struggle.
A significant portion of the bailout funds were then utilized to pay top executives in the companies. Freddie Mac and Fannie Mae report that these monies were needed to pay top execs because their services are vital in keeping the companies afloat during troubled times. Freddie Mac and Fannie Mae also report that although the pay might appear excessive to some, the amount top execs were paid overall averages about 40 percent lower than the amount that top execs were paid prior to the financial crisis in 2008. Recent cost estimates for the taxpayer bailouts exceeds 100 billion today through 2014. Frannie and Freddie just lost billions more in the last quarter and are asking Congress for more funding.
Some congressional leaders feel that the funding and the executive compensation is extremely excessive. At a time when the unemployment rate is above average nationally and foreclosure numbers are above average, many Americans are upset. The bailout funds should be unacceptable to most, but the low interest rates makes the reality of the situation less vivid. Most people in America need the low interest rates to enter into the mortgage application process.
The national unemployment rate in America recently dropped below 9 percent. This was far better than what most economists had been anticipating and recent economic activity in the U.S. has skewed toward the positive. The housing market continues to struggle but the low interest rates remain and are enticing. Interest rates in December continue to remain at all time lows.
Mortgage application indices are up for the month of December, due in part, to the rates which have remained at all time lows. As of the end of the first week of December, on-line analysis reveals that the Mortgage Application Index year-over-year change is positive by about .07 percent. The Mortgage Refinance Index is positive by approximately.10 percent and the year-over-year change for the Mortgage Purchase Index is just above break-even as well. The national unemployment rate in the U.S. dropped in noteworthy fashion and more Americans are in better position to apply for and receive a home loan. Freddie Mac is posting the 30 year fixed rate at 3.99 percent. The 15 year fixed rate is posting at 3.27 percent at this point in time. Economic signs are pointing in a better position and the new year could reveal positive trends in the housing market as well. If the housing market recovers in acceptable fashion, the bailout fund will present as less controversial.
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