It is no doubt that Fannie Mae and Freddie Mac are the backbone to the success of the US mortgage industry. So how is it that these two mortgage giants came to a position where the government is stepping in to make certain that they do not fail?

Ben Bernanke testified before the Committee on Financial Services that the US economy would “expand at a pace appreciably below its trend rate” through 2010 in large part to the current housing slump and tightened lending standards. Inflation, which is running at 3.5 percent annual rate over the first five months of 2008 is likely to continue its increase and may push mortgage rates up even higher.

Mortgage rates fell during the past week as many investors feel that it is unlikely that the Federal Reserve is going to raise key interest rates anytime soon.

The “comfortable income” many seniors thought they had planned is often eroded by rising costs and incomes which don’t keep pace with those costs. Are there any guarantees anymore...

According to the latest survey by the Mortgage Bankers Association mortgage rates on fixed and adjustable mortgage have begun to decline. Mortgage refinance applications also picked up over the week as homeowners take advantage of falling mortgage rates.

What Ben Bernanke is saying is that although the weak dollar is driving costs up and therefore inflation is rising, the Fed does not feel that they can raise the interest rates at this time, all bad news for seniors living on a fixed budget.

That’s according to Jim Rogers, George Soros’ former fund manager, when asked his thoughts on the Fannie/Freddie bail out. Simply put, Hank Paulson and Ben Bernanke are bailing out their friends on Wall Street and passing the buck to 300 million American taxpayers.

Treasury and Fed Promise Bailout for Fannie and Feddie, SEC Crack Down on Rumors. Bloomberg reports that US Stock-Index Futures Gain; Fannie Mae, Freddie Mac Advance.

The financial crisis symptom de jure: the struggles faced by Freddie Mac and Fannie Mae the giant mortgage loan repackaging companies chartered by the U.S. government, and (assumed to be) guaranteed by Congress. In fact the loan guarantees with the Treasury Department that are available to the companies amount to only a few billion dollars, so the US government's official obligation to help is miniscule.

New York is creating a 90-day stalling period before foreclosure to give homeowners in trouble time to research their options. Fairfax, Virginia is using tax dollars to buy up foreclosed homes with the hope of stabilizing neighbors crashing property values. $180 million in tax dollars have already been allocated to the National Foreclosure Mitigation Counseling program, meant to talk homeowners through the process of fighting to keep their homes.

There is another side to this story that affects senior borrowers very deeply that must be considered and needs to be brought out. IndyMac Bank owns Financial Freedom and holds one of the largest portfolios of both government insured Home Equity Conversion Mortgages...