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Obama sounds Fannie and Freddie death knell

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Mortgage Professional America | 07 Aug 2013, 04:58 AM Agree 0
President Barack Obama called for the replacement of Fannie Mae and Freddie Mac with a new government mortgage reinsurer that would be more insulated from financial reverses
  • Concerned Originator | | 07 Aug 2013, 07:32 AM Agree 0
    So it sound to me that he is steering the public to government backed mortgages such as FHA? Is this a coincidence, now that FHA No Longer drops monthly MI at 78% LTV?? Has anyone looked at the APR NOW on FHA Mortgages, it is really high when you include that monthly MI in for the life of the mortgage.
  • Elaine R | | 07 Aug 2013, 10:00 AM Agree 0
    He wants to install a "mortgage insurer insulated from financial reverses". On what planet is this guy coming from??? There are no such guarantees. Pathetic idea.
  • Larry in NJ | | 07 Aug 2013, 10:09 AM Agree 0
    I believe the proposed legislation that would replace FNMA & FHLMC with a 'new and improved' entity does not solve a problem, rather, it replaces one with another that could be even more damaging to the housing industry than the system in place for over forty years. The GSE's fell victim to government intervention in prudent underwriting guidelines, management selection through political appointment and social engineering mandates. These factors along with a the imposition of the 'due on sale' clause created financial instruments that pleased the secondary market but left home owners without the ability to sell into a falling market, underwater and with no escape other than default and it's consequences, thus shrinking the size of the home buying market together with values into the vortex of a spiraling collapse. To require the proposed investment removes capital from the markets and limits the players to those long on liquidity. This would curtail competition, increase costs and leave home purchasers with only those mortgage products that the 'new and improved' agency would consider acceptable based upon goals set by politicians with little or no understanding of the industry.
  • Gretchen | | 07 Aug 2013, 01:13 PM Agree 0
    This needs to be taken off the backs of the taxpayers, however, the staple of home ownership in America is the 30 year fixed rate mortgage. Homeownership will decrease substantially without it, and jobs will be lost. Hopefully some private entreprenuer will step in to the rescue. If only we could have someone who understands our industry regulating it! Sadly, none of our elected officials qualify......
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