Wednesday | February 08, 2012
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By
YOUNG MONEY Staff
12 September 2008
The Big Takeover: Fannie Mae & Freddie Mac
You’ve probably heard about the big takeover of the nation’s two largest mortgage finance companies: Fannie Mae and Freddie Mac. If you’re thinking that this doesn’t affect you, you’re wrong. Something this big affects us all. The Congressional Budget Office has suggested that this takeover will likely cost American taxpayers around $25 billion. Yes, this is a lot of money. But before you start complaining, think about the cost of Fannie and Freddie failing. These two agencies hold $5 trillion in loans. That is the largest debt of any private company ever, throughout history. Here’s some perspective for you: it’s larger than any other COUNTRY’S debt, except, of course, the United States.
The collapse of Fannie Mae and Freddie Mac would have been a global disaster. Think credit meltdown—banks going under, less credit for people to borrow, less money going into the economy, and less jobs. People wouldn’t be able to buy houses, car, or anything else. Entrepreneurs won’t be able to get financing. The economy would stop. Think Great Depression—or worse.
Of course, the Fannie/Freddie Takeover also affects everyone looking to buy a home. Bankrate.com has announced that the average 30-year mortgage rates have already dropped from 6.3% to 5.8%. This makes buying a home more affordable. As home prices stabilize, the banks that own mortgages won’t lose as much money and (fingers-crossed) the economy will start to stabilize.
The Social Networking Debit Card: Facecard
It was bound to happen. The popularity of the social networking site Facebook has spawned many imitators and now a new prepaid reloadable MasterCard® debit card has jumped on the bandwagon. Meet Facecard. The card is offered through the Iowa-based MetaBank and promoted through, you guessed it, Facebook. The Facecard websites boosts: cool stuff, free stuff, use it anywhere, manage it anywhere, give gifts, and support causes. The Facecard website claims: “Facecard differs from a credit or a debit card because you can gift money to friends and family with ease, electronically send allowances or emergency funds, and withdraw money from ATMs worldwide.
Facecard is safer than cash since you will not be liable for unauthorized transactions if your facecard is lost or stolen and if you follow the instructions for reporting a missing card outlined in your member agreement.”
But beware. According to the Wall Street Journal, “the card imposes other costs. There’s a $1.50 fee for ATM withdrawals, in addition to whatever fees are charged by the dispensing bank. There’s also a $4.95 monthly inactive-account fee if the card goes unused for more than 90 days. Additionally, cash and checks cannot be uploaded to the card, only money through bank accounts or other credit and debit cards.”
If you are in college you have been targeted. Facecard is launching an aggressive marketing campaign directed primarily at you. Sure a debit card may keep you from going into debt or getting hit with overdraft fees but the additional fees Facecard imposes warrant some serious research.
Young Money Election Results
According to the Young Money election poll, college students still prefer Obama.
Young Money
58% Obama/Biden
42% McCain/Palin
Other National Polls
Gallup Tracking
44% Obama
48% McCain
NBC News/Wall Street Journal
46% Obama
45% McCain
USA Today
44% Obama
54% McCain
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