Fannie, Freddie, and You: How the Bailout Impacts Main Street

If you weren’t facing foreclosure last week, you could be in danger now.

The news media is hailing the bailout as the savior of the economy. But let me ask the question that no one else seems to be asking... WHERE IS THE MONEY COMING FROM?

The recent government bailout of Fannie Mae and Freddie Mac is not designed to protect the homeowner, but to support Mortgage-Backed Securities by pledging public dollars. In plain language, the government's plan is to use taxpayer's money to support the damaged mortgage giants, and will sell MBS's on the open market to the highest bidder.

What impact could this have on your wallet? Potentially, a high impact.

In my opinion, taxes WILL have to increase to cover this move. If the housing market continues to decline, this could mean tens of millions of dollars to John Q. Homeowner – money that is already stretched to the limit by increased food costs, rising gas prices, and declining house values.

Now more than ever, homeowners need to accurately assess their financial situation. Here are four things you can do immediately:

1. Face your finances: Accurately assess what economic conditions are doing to your bank account. Take a deep look at what you're earning, spending, and saving and how to adjust those numbers so you can save more for future incidents.

2. Get a new tax assessment: A decrease in neighborhood real estate values can result in tax savings for you. Review your last tax assessment and go to your county to dispute the results. An adjustment could save you hundreds - even thousands - per year.

3. Review ALL options, not just the obvious ones: Look for creative solutions to a cash-crunch. Can you rent out a portion of your house? Should you consider selling your home and moving into a high-end mobile home? Can you sell your car and travel via public transportation? Think of these ideas and more to save funds and decrease expenses.

4. Get a fixed-rate loan: Locking in a rate now can save you from future worry. If you can qualify for a fixed-rate loan under the new FHA program, do it now!

Do not wait until taxes increase to take action... implement proactive solutions immediately!