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FHFA could slash Fannie and Freddie loan sizes

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Mortgage Professional America | 10 Sep 2013, 06:21 AM Agree 0
Federal regulators are considering a slashing the size of mortgages that can be backed by Fannie Mae and Freddie Mac, even as Congress considers killing off the mortgage giants
  • Cary Michael | | 10 Sep 2013, 09:34 AM Agree 0
    Makes sense lower the limits as home values rise, idiots!
  • Paulsmoney | | 10 Sep 2013, 10:08 AM Agree 0
    Reduced mortgage amounts is too little too late in the fix Fannie/Freddie quagmire; Kind of like a fiscal tourniquet.

    Building another replacement government agency is at best ineptitude or perhaps arrogance by lawmakers!

    As it is now, the government, through a host of friendly information channels, is misleading the US with regards to housing recovery.
  • Licensed mortgage pro | | 10 Sep 2013, 10:35 AM Agree 0
    It is already to late for adequate advance notice if the mortgage limits are to change lower for January. When they change higher a locked mortgage is not impacted as it would still be under the limit.
  • Greg Cook | | 10 Sep 2013, 10:37 AM Agree 0
    Be careful what you wish for. Getting rid of Fannie and Freddie will make financing more difficult and more expensive.
    Try to get a jumbo mortgage today and you'll see what financing will be without F&F
  • Stan J | | 10 Sep 2013, 10:45 AM Agree 0
    It is about time that limits for market value adjust for the decline. Otherwise, there would be no need for HARP, would there?
    Enough of the taxpayer assisting investors as that is what has been happening all along! The lenders should be willing to shoulder more risk in such a lucrative business.
  • Bayview Mortgage Inc | | 10 Sep 2013, 01:30 PM Agree 0
    I think they should go one step farther and require everyone to broker mortgages unless they use their own funds and hold the paper for 5 to 10 years. this would cut out all the bogus paper on the market.
  • Jana | | 10 Sep 2013, 04:15 PM Agree 0
    @ Bayview Mortgage.... and to whom would you broker said mortgages?!!
  • Bayview Mortgage Inc | | 10 Sep 2013, 07:11 PM Agree 0
    Jana, Business will go on, like it has done. the banks and large lenders would just slowly drop fannie and freddie and force the higher mortgage to value mortgages thru FHA. If you noticed. All the large lenders are starting to hold their own servicing. They are only selling the really low rate mortgages and lower credit score mortgages to the large banks. When rates drop to 3.5% next month. You will see alot of table funding lenders and brokers close down. since they won't be able to cover their service release payback.
  • Jana | | 10 Sep 2013, 07:47 PM Agree 0
    Bayview... your logic and knowledge of the industry escapes me
  • Cary Michael | | 11 Sep 2013, 06:20 AM Agree 0
    Bayview rates to 3.5% NEXT month, perhaps you should do a name change to OPTIMISTICview.

    Exactly what basis do you see for a drop in rates, I assume we are talking 30 Year, by +/- a full point?

    Please make your case.
  • Stan J | | 11 Sep 2013, 08:39 PM Agree 0
    We must wean ourselves from the teats of F&f.
  • Mario | | 14 Sep 2013, 01:01 PM Agree 0
    @caryMichael 's I don't think you understand what Fannie/Freddie are trying to do by reducing mortgage limits which is to reduce their market share while trying to reduce portfolio risk by requiring the private market to shoulder a large share of the market.

    However, the issue I find with this plan is that i doubt it actually lower protofolio risk due to the demographic showing that the defaults rates on prime mortgages above 300k is substantial (don't have stats on me but more than 50 percent) lower due to the credit demographics of this borrowers.

    @gregcook I agree that that currently credit requirements from the private sector (jumbo lenders) are tougher than Fannie/Freddie but I think we will the private market loosen up standards to a line with Fannie/Freddie in the near future as the GSEs existence comes into question. E.x. Cashcall providing orginating new HELOC up to 125 ltv and I recently closed four no doc mortgage for an investor to purchase 4 properties (30% down, 660 minimum credit, 15 yr ballons)....

    @bayviewmortgage if your rent I hope you have some money on the line because their are going to be a lot of market losers if 3.5 comes available unless you mean on a 15 year but we could all hope soo.....
  • Bayview Mortgage Inc. | | 15 Sep 2013, 06:11 PM Agree 0
    I didn't think of that, Mario. They could Make any borrower under 235,000 go to FHA and any borrower over 236,000 go to Freddie and Fannie and then post limits. Thus FHA will serve the purpose it was developed and Freddie and Fannie, its. Also post income requirements. so if someone is making over 75,000 they would have to go to Freddie or Fannie. This would require good rates or the lenders wouldn't be able to write the mortgages. unless they held the paper and by-passed the GSA's.
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