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Federal National Mortgage Association Message Board

  • rick.nagra rick.nagra Sep 10, 2013 4:48 PM Flag

    HUD chief talks mortgages at NC conference

    "We have to, within government, make sure that the rules are clear," he said. "It's simply wrong for a family to lose out on an opportunity, you to lose out on business, us to lose out on the growth that can come to our economy overall if a family is ready to buy and be successful and can't get access to mortgage capital."
    Last month, Donovan noted, HUD and other regulators revised a firm down-payment requirement to qualify for the best loan rates. Lenders now must ensure that borrowers have the ability to repay their mortgage or retain more of the default risk, a rule proposed earlier this year by the Consumer Financial Protection Bureau.
    The administration's plan to overhaul the country's mortgage finance system includes a greater role for private investors and winding down government-backed Fannie Mae and Freddie Mac, which made bad bets in buying mortgages from lenders, guaranteeing them against default and selling them to investors. Taxpayers bailed out Fannie and Freddie in 2008 with $187 billion.
    But Obama also wants to avoid shocking an improving housing sector in which sellers have enjoyed a 12 percent rise in home prices in the past year, Donovan said. That includes preserving the popular 30-year, fixed-rate mortgage, he said.

    Last paragraph is the best ; if you want to avoid shocking an improving housing sector then go ahead and reform FnF with tighter rules but keep them around

    Sentiment: Strong Buy

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    • It is important to note that nobody in their right mind will pay more just so that burden of responsibility will be more on private investors. Also people want the reassurance of gov. backing to ensure stability of housing market and to make housing more affordable to as many people as possible while keeping the prices low. You can not have a 30 year mortgage without having to compromise any of these points. Another point is you can not implement what Obama and Congress want to implement without reducing the pool of people who can buy a house. Any increase in the fees/loan price will only serve to limit the availability of housing to the pool of people who want to own a home. The meaning of wind down used by Obama is to reduce the role of F&F not to eliminate them. Also five years means new president and congress and by then, people will come to their senses and wind down of F&F will feel out of date. By then housing will be healthier, economy will be better, and we should be close to the height of economic recovery, and perhaps in the middle of an economic expansion.

    • " But Obama also wants to avoid shocking an improving housing sector " ; that tells me Obama needs FnF more or less ; sure he will reform the GSE because he has to make it look like he is doing something but overall FnF will stay ; taxpayers will understand because they know FnF paid them back and they want lower interest rates and the 30y mortgage to stay

      Sentiment: Strong Buy

 
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