I hosted a teleconference today with Sean Purcell, a colleague at my firm. We presented for fiteen minutes about the short, medium, and long-term prospects of mortgage finance in light of the US Treasury conservatorship of Fannie Mae and Freddie Mac.
Listen to the TeleConference Podcast Here
Sean and I tried to stay away from the political fallout from the event but in the midst of an election year, that' ind of tough. We noticed in the Credit Suisse research report that the analyst felt that the government-owned mortgage companies could now be used as an instrument for social engineering. My guess is that if Obama wins, the focus will be on struggling homeowners, looking to stay in their home, Should Mc Cain win, the focus will most likely be on making financing affordable for new homeowners.
I think rates will stay below 6.25% this year. After that, the effect of the GSE defaults could be inflationary and put an upwards pressure on mortgage rates.
