According to the article below, the government may levy fees on the mortgage industry which will likely be passed along to the borrower in return for federal backing of mortgage loans. Sounds like business as usual.
... June
------------------------------
Reform of Fannie and Freddie Could Translate to Higher Costs For Borrowers
Fairly interesting article by Deborah Solomon and Nick Timiraos in the Wall Street Journal today that says the government may levy fees upon the mortgage industry (which will likely be passed along to the consumer) in return for federal backing of mortgage loans.Under the current system, mortgages are originated by mortgage companies, brokers, loan officers, etc. These mortgage are then sold to investors or securitized and sold to investors. Right now, Fannie Mae and Freddie Mac are pretty much the only investors who are purchasing mortgages. Together they back more than 90 percent of single family mortgages in the United States.
Fannie Mae and Freddie Mac were seized by the government in 2008 in order to avoid their financial collapse. Since that time the Obama Administration has dumped $150 billion into the GSEs, and has pledged an unlimited amount of capital to backstop their losses. The Congressional Budget Office estimates the total bailout could cost around $400 billion, and many analysts estimate the bailout could cost more, with a worse case scenario of almost $1 trillion. In a nutshell, U.S. taxpayers back almost all of the mortgages in the country (congratulations, you’re an investor in the housing market!).
Read More
