Reducing the Role Of Fannie Mae and Freddie Mac!
The regulator for Fannie Mae and Freddie Mac is attempting to gradually shrink the two housing-finance giants and create a new market for mortgage-backed securities to help the private sector buying Magnolia TX real estate. Recently, the Federal Housing Finance Agency proposed replacing the mortgage-backed securities that Fannie Mae and Freddie Mac currently issue with a uniform security in a strategic plan it sent to Congress and the Obama administration.
Fannie and Freddie buy mortgage loans from primary lenders, pool them, and sell them with a guarantee that investors will be paid even if borrowers default. The two have helped people buy homes at affordable interest rates, but the government seized them in September 2008 after the mortgage market collapsed, and defaults and foreclosures of Magnolia TX real estate real estate piled up. Because the bailouts of the two agencies have so far cost taxpayers roughly $150 billion, a figure which continues to grow, both Congress and the Obama administration have searched for ways to reduce the government’s role in the purchase of Magnolia TX real estate real estate.
Current reform proposals include the following specifics:
- Shrinking the size of the portfolio of mortgages held by government housing finance agencies by at least 10 percent a year.
- Creating an insurance fund for mortgages much like bank deposit insurance, supported by premiums paid by lenders.
- Winding down government subsidies of mortgages by raising the fees charged to cover the risk of default.
- Limiting the government’s role in housing finance to Federal Housing Administration backing of mortgages, turning most of the market over to the private sector.
- Phasing in a 10 percent down payment requirement for government guaranteed loans.
As one might expect, this economic matter is also a political issue. Many Republicans believe that the role of government should be dramatically scaled back without delay and argue that private lenders can adequately provide housing finance to any and all qualified buyers of Magnolia TX real estate real estate– without interference from the government. On the other hand, Democrats who support continued government involvement in mortgage lending believe that public support of housing finance is needed to guarantee access to affordable loans for the middle class. They counter that only government backing can ensure a steady flow of loans during hard times when private lenders pull back.
Whether you are new to the Magnolia Texas real estate market, thinking of moving up, or you’re an experienced investor, Pam Sitterly has the expertise, proven track record, and resources to help you buy Magnolia TX real estate for sale or market Magnolia TX homes for sale. Enthusiasm, knowledge of the area and personal concern for her client’s interests combine to make Pam an outstanding resource for your real estate transactions.
Pam works extensively to help Buyers and Sellers meet their Magnolia Texas real estate goals. For more information about buying or selling