Fannie, Freddie, Whatever it takes.

So Warren Buffet thinks it's a great idea. Frankly that's about good enough for me. So does the Dick Vitale of money, Jim Cramer at CNBC. In fact just about anyone you ask today is in favor of the government take over at the two lending giants Fannie May and Freddie Mac. While it would have been best that they not have to be dealt with in this way, the take over saves millions from foreclosure, nudges the real estate market forward and probably saves a run on one or several other lending insitutions.

For those of you who have their fannies and freddies confused, here's the simple version of who they are and why they matter.
Fanniemae and Freddie Mac, are the largest loan guarantors in the country. They are responsible, essentially, for the health of the loan mortgage market in the United States. They have nothing to do with a semi sweet box of chocolate or a deceased rock star.

They do have a significant impact on the health of the U.S. housing market and subsequently the American public as a whole. Mark Zandi, chief economist at Moody's Economy.com predicted that 30-year mortgage rates, currently averaging 6.35 percent nationwide, could dip to close to 5.5 percent. That's because investors will be more willing to buy the debt issued by Fannie and Freddie -- and at lower rates -- since the federal government is now explicitly standing behind that debt.

"Effectively, the federal government has now become the nation's mortgage lender," he said. "This takes a major financial threat off the table."

Friends, if conventional mortgage rates begin to move towards a 5.5% rate from the mid 6% rates were seeing today, the faint light we've been imagining to see at the end of the tunnel will start to get brighter. Do not for one second think that this will cure all of our ills. There are still too many foreclosures both in the Indianapolis area AND nationwide for that to be the case. There is still far too much resale inventory for that to be the case. There is still a total trepidation among buyers that they are paying too much that won't go away anytime soon.

It will, however, add hope....which may be the most important factor in determining the direction of the market in 2009.