As politicians call for the federal government to come to the rescue of Freddie Mac and Fannie Mae, Coloradans are reminded that the two mortgage giants play an influential role in the Centennial State’s housing market.
“Given that the entire U.S. housing finance system is based on the role that Fannie/Freddie plays in creating affordable mortgage terms, the importance of Fannie Mae and Freddie Mac is vital to housing in Colorado,” said Zac Urban, housing counseling division manager for Brothers Redevelopment, a Denver-based, non-profit housing agency. “Without the secondary market that is created/supported by Fannie and Freddie, the mortgage terms available to consumers would be in the realm of 30 percent down payment, 15 percent interest rates and 10-year terms.”
According to Freddie Mac’s own report, in 2006,the agency:
Enabled 8,645 Colorado home buyers to purchase their first home.
Financed loans for 40,949 low- and moderate-income Colorado families.
Helped 657 Colorado families avoid foreclosure.
Funded residential loans with an average mortgage of $170,544.
Congressman Ed Perlmutter, D-Colo., called Fannie Mae and Freddie Mac’s stability “crucial” to the state’s housing and financial markets.
“Here in Colorado, families are feeling the economic squeeze, and we know the credit crunch and the housing crisis are not over. That is why Congress needs to act swiftly to get a housing bill to the President that extends the [Federal Housing Administration’s] loan authority, revamps the oversight of government-sponsored enterprises and overhauls the FHA’s mortgage insurance program,” Perlmutter, a member of the House Financial Services Committee, said in a statement.