Reaction To Fannie Mae & Freddie Mac Bail Out

By Jeffrey Smith, The News On 6

TULSA, OK - Many homeowners are cheering.  Monday was the first business day since the government bailed out the two companies holding half the mortgages in the United States.

In the wake of the government takeover of Fannie Mae and Freddie Mac, the Dow Jones on Monday, at one point, surged 300 points before settling back down.  Oklahoma's largest mortgage lender says you can expect major changes in the upcoming months.

Jim Huntzinger is the chief investment officer for the Bank of Oklahoma.

"The green numbers are stocks that are up from Friday's close.  The red numbers are stocks that are down from Friday's close," said BOK's Jim Huntzinger as he reviewed market activity on his computer.

"I think it helps the whole market.  The low end, middle end, high end.  Marginal buyers, highly qualified buyers.  I think it helps everybody, said BOK's Jim Huntzinger.

The Bank of Oklahoma executive says Oklahoma's foreclosure crisis isn't on any top10 list, but wherever you look in Green Country, homes are for sale for cheap.

So how does the move affect you?

"I think the major advantage to local Oklahomans is that mortgage rates should come down a little bit. Maybe a quarter, maybe a half percent.   So, it really wasn't a credit issue for this state.  I don't think, for Oklahoma City or for Tulsa, as much as it is a more available credit, plus credit available at a cheaper price," said BOK's Jim Huntzinger.

He says criticism of the decision is moral, not financial.

"You can talk philosophically about the government coming in and bailing out what is essentially a privately-run institution," said BOK's Jim Huntzinger.

BOK is the state's largest underwriter of mortgages.  They say the mortgage mess could take another year to bottom out.

There's a perception that taxpayer dollars will now be spent to bail out homeowners stuck in bad mortgages they shouldn't have signed in the first place.  Huntzinger says public money resulting from the federal takeover can't be used for that purpose.