Nobody is exempt from these new risk fees, not even those with great credit scores and monster down payments.
Freddie Mac laid out new fees to lenders just before Thanksgiving.
These new fees will only cool an already icy housing market.
They kick in in the Spring.
If Fannie and Freddie weren’t in business, few banks would issue 30-year mortgages. The whole mortgage businesses depends on Fannie and Freddie buying mortgages.
I think Fannie and Freddie are a great test of the Republican House’s commitment to reducing government spending and government interference in the economy.
Both corporations have required massive federal financial infusions — estimated at close to $150 billion — since the housing market began deteriorating, and they now operate under a federal conservatorship arrangement. The Obama administration plans to submit long-promised proposals to Congress this month on what to do with the two — phase them out, restructure them, privatize one or both of them, or other solutions.
But meanwhile, Fannie and Freddie continue to fund or guarantee upward of two-thirds of new mortgage originations. Because of their sheer size and market dominance, they play pivotal roles in determining whether — and how fast — the housing market can rebound.
Their new fees scheduled to start this spring, however, don’t appear likely to make financing a home any easier. Some potential buyers who have high credit scores and hefty down payments may be surprised that even they are being targeted for higher “risk-based” fees.