Hopefully after reading the preceding article you get a sense of how crucial Fannie Mae and Freddie Mac are to both our mortgage sector and the overall stability of our economy. In recent months there has been widespread speculation about the U.S. government possibly bailing out the two mortgage giants and now that day has come. The federal government has taken control of both GSEs under a temporary government-supervised conservatorship. The Federal Housing Finance Agency will establish a short-term program to purchase the two companies’ securities that are backed by mortgages. In addition, they will replace the current executives and board of directors at both firms. Although this strategy will be expensive for taxpayers, a failure of either Fannie or Freddie could have been detrimental to the U.S. economy. There is also speculation that the American people will benefit from the bailout. We may begin to see lower interest rates, increased demand for our homes and an increase in our property values. The move should also alleviate concerns of foreign investors and restore their faith in the American government and economy. This is very important because these investors play an important role in our financial markets. The positives far outweigh the negatives in connection with the bailout and they certainly outweigh the detriment that could have occurred if Fannie and Freddie collapsed. It is for these reasons that we will continue to be optimistic on the outcome and we will keep you posted every step of the way.