By the time you are reading this, chances are high that the U.S. government will have finalized the details of the upcoming – and much publicized – Fannie and Freddie “bail-out” but few real estate buyers or sellers have much understanding of how it impacts them personally.

Other than those who have invested directly in Freddie or Fannie, there is still cause for concern or congratulations depending upon your stance. A few things are certain;

1. Freddie and Fannie are considered “too big to fail”. Combined, these two giants guarantee funds for over half of all mortgages in the nation. This guarantee is what allows many banks to offer low interest loans to those who would otherwise not qualify. Without the guarantee, interest rates would rise, required down payments would increase dramatically and credit would become more difficult than ever. Resulting in fewer potential buyers; making it more difficult to buy or sell Tampa real estate. As it is, the other have of privately under-written mortgages continue to struggle leading to an upcoming credit crunch.

2. Critics point to the fact that the U.S. government will be “nationalizing” mortgages by becoming the lender of last resort for more than half the mortgages in the nation. While the exact details of the bail-out remain to be seen, what is certain is that the federal government is adding several trillion dollars to the national debt in order to bankroll this plan.

3. Still won’t stop the credit crunch. While the proposed bail-out will stop the bleed of current mortgages and free up funds to allow underwriters to originate more mortgages, it does nothing to assist the private banks with risky mortgages on the books. Plan to see more banks join the ranks of Countrywide as they write-off risky mortgages and continue to tighten lending standards.

4. Perhaps the most important – and more controversial – aspect of the bail-out is the purchase of preferred stock versus common stock. Most analysts agree that the current plan will provide protection for preferred stock (ie, China and other large investment funds) while allowing common stock to float with the market (resulting in billions of dollars of losses). When the news is finally released, look for the winners and losers to find out what the long term impact will be. If China and other large investors experience significant losses then it could result in dramatic constraints in the money supply, interest rates and underwriting experience for years to come. If smaller investors are hit with massive losses it could impact the stock market and national financial news during a time when consumers are frightened about their financial future.

The Bottom Line: The mortgage and real estate industry are undergoing dramatic changes with long term potential impact. Anyone interested in Tampa homes for sale should keep a close eye on the mortgage events ; missed opportunities like these might take years to present themselves again.