to $64.2 billion Total Specified Contractual Obligation in YEAR 2007 of Freddie Mac. In my opinion, this was a sign of bursting of the real estate bubble because a difference of $298.3 billion was abnormal. This Contractual Obligation was the result of bursting of the housing bubble in 2008. While the housing bubble is bursting in 2008, the bond bubble started to surge from 2008 until 2012. Freddie Mac is allowed to borrow money in the bond market at lower yields than other financial institutions to correct the bursting period of the housing bubble. The explosive increase in monetary supply through quantitative easing had fueled bond prices from 2008 to 2012 that resulted the bond bubble in the market. The bond bubble burst in 2013 with Contractual Obligation of $292.5 billion compared to its Contractual Obligation of only $64.4 billion in 2012 with a difference of $228.1 billion, it was now the result of bursting of the bond bubble. Fannie Mae and Freddie Mac are charged with keeping the U.S. mortgage market running smoothly. Both companies buy mortgages from various lenders and help maintain a steady and reliable source of mortgage funding for individuals, families, and investors. The 28 million homeowners with mortgages backed by these agencies are expected to keep a watchful eye on how the COVID-19 has impacted these homeowners. Like all major crashes, prices first rose then fell. My beliefs and my opinions are based on the research I made from reliable and credible sources why I refinanced my mortgage to take advantage of the current housing bubble and the lower interest rate to protect our property in the upcoming bursting of the housing bubble that I strongly believe that will happen in 2022 or 2023.
References:
Abreu, Dilip & Brunnermeier, Markus K., (2003, January). Bubbles and crashes. Retrieved from https://papers.ssrn.com/ sol3/papers.cfm?abstract_id=296701
Folger, J. & Mansa, J (2021, December 31). How they help the
clxxxiii
Powered by FlippingBook