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Big news in the real estate world today!
Fannie/Freddie On Chopping Block –The white house came out with their mortgage reform options today, including the shut-down of Fannie/Freddie. There is a lot of analysis going on, here’s some from
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The Obama administration laid out three broad options Friday for
reducing the government’s role in the mortgage market. All three would
almost certainly lead to higher interest rates and costs for borrowers making it even harder to qualify for a home loan.
The administration said in a report that the government should withdraw its support for the mortgage market slowly, over five years or more. The report describes a path for winding down the troubled mortgage giants Fannie Mae and Freddie Mac.
But
rather than making a single
recommendation, the administration offered
Congress three scenarios and
will let lawmakers shape the final policy.
The options are:
No government role, except for existing agencies like the Federal Housing Administration.
A government guarantee of private mortgages triggered only when the market is in trouble.
Government
insurance for a targeted range of mortgage investments that already are
guaranteed by private insurers. The government guarantee would kick in
only if those private companies couldn’t pay.
The
private sector will assume a greater role in housing finance under all
of the options. The government currently owns or guarantees more than 90
percent of new mortgages.
The actual report – If you prefer to read things for yourself, below is the report,
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Windermere Real Estate, Sun Valley – Hailey, Idaho @ George Martin, Jr. Associate Broker
