US mortgage rescue ‘may help our loans’

18 September 2008

A leading mortgage expert has said that the recent bailout of Freddie Mac and Fannie Mae by the US Government may have a beneficial knock-on effect on the UK loans market.

Melanie Bien, Director of Savills Private Finance, told The Times: "UK banks have exposure to Fannie and Freddie debt. The US government’s underwriting of that debt means that money UK banks may have set aside to cover potential losses can now be freed up to use in the UK mortgage market."

A spokesperson for Think Money commented that any money freed up by the bailout could also extend to personal loans and other forms of credit.

The news comes as the Lehman Brothers investment bank files for bankruptcy, a move that many analysts say could have a huge impact on the global economy.

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