While Fannie Mae is working on their finances to insure that they do not go under during these tough market times, the consequences of this is going to be felt by anyone wanting to take out a mortgage.

After losing $2.3 billion in mortgage loans, Fannie has announced that they will be making chances in mortgage pricing and liquidity. Namely, they are going to stop buying loans termed high-risk, make a higher risk premium for any loans bought in more troubled/declining areas of the market, and raise their overall fees. Some loan fees were increased by a quarter of percentage point, depending on the borrowers´ credit scores and down payments. Their ¨adverse market delivery charge¨, a fee added on for every loan bought by Fannie, was doubled to 0.5%.

Chief economist for Moody´s Economy.com, Mark Zandi, remarked on the effects that these actions will have, as they "have raised the costs of mortgage credit and reduced its availability,...Policy makers had been hoping they would move forward to provide more credit and now they're just hoping they don't pull back."

Keith Gumbinger of HSH Associates, feels that these changes were obviously going to occur, "The cost of mortgage credit is getting pushed higher by the issues in the marketplace...They can't reduce their market exposure and that means more expensive mortgages."

Lawrence Yun, a chief economist for the National Association of Realtors, feels that these changes are going to drastically impact the market, "Any time there's an additional imposition of fees in obtaining a mortgage, it knocks some potential buyers out of the market." Many first time buyers are on a strict budget and do not have the necessary resources to pay for added on fees or interest rates. Less buyers on the market means that more homeowners will seriously debate selling, fearing that their home will dangle on the market for a long amount of time.

Fannie will also stop buying Alt-A loans at the end of 2008. These loans made up almost 11% of Fannie´s loans during the last few years. Alt-A loans are usually taken out by those who can´t or won´t document income, assets, etc. Once Fannie stops taking on these kinds of loans, these borrowers will be hard dealt to obtain similar loans. Most often the borrowers of these kinds of loans are looking to buy second homes for rental or resell purposes.

Freddie Mac, also dealing with substantial losses, will also be making measures to reduce their risk as well.

Yun commented on the irony of the current Fannie and Freddie situation, "They were created to provide liquidity in times of crisis,...If they don't do that, what's the point of having Fannie and Freddie in the first place?"