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Fannie, Freddie Downgrades Likely To Hurt SoCal Home, Car Sales

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LOS ANGELES (CBS) — Another credit downgrade for two of the nation’s biggest loan agencies could push mortgage rates higher and leave more Angelenos digging deeper into their pockets.

Credit rating agency Standard & Poors downgraded the credit of Fannie Mae, Freddie Mac and most of the Federal Home Loan Banks just three day after downgrading the credit of the U.S. federal government.

KNX 1070’s John Brooks reports the move could push interest rates higher, but perhaps more symbolically, it could add even more stress to the already-anxious American consumer.

The move could deter more families from taking on debt for big-ticket items like homes and cars.

“I wouldn’t buy a car,” said one man, “but actually, right now, stock prices are down, now’s probably a pretty good time to start investing.”

Investors fear the Federal Reserve could start ratcheting up interest rates, which in turn would make it more expensive for potential home buyers to borrow money.

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