 |
| 30 Yr Fix |
6.52% |
0.00% |
| 15 Yr Fix |
6.10% |
0.03% |
| 1 Yr ARM |
5.22% |
-0.05% |
| 5/1 ARM |
6.05% |
-0.02% |
| 30 Yr Tres |
4.70% |
0.04% |
| Fed Prime |
5.00% |
-0.25% |
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Treasury Secretary Advocates GSE Assistance for High-End Borrowers
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Treasury Secretary Henry Paulson announced Monday that he
was in favor of temporarily lifting the dollar limit on loans
purchased by Freddie Mac and Fannie Mae, allowing them to provide a market for
so-called "jumbo mortgages."
Under current rules, the two government sponsored enterprises (GSEs) cannot
purchase loans that exceed $417,000.
Paulson is advocating that this limit be lifted and appeared not to disagree
with earlier suggestions by Federal Reserve Chairman Ben Bernanke that the new
limit could be as much as $1 million. Paulson stressed, however, that he did
not favor raising the loan limits forever, only until the current credit crunch
eases.
Such a change, Paulson said, may help "jump start" the market for
the largest home loans and would be part of a package of legislative changes
which the administration has long sought to reform federal regulation of the
two corporations by strengthening the Office of Federal Housing Enterprise Oversight.
Paulson suggested the changes during a speech in Orlando, Florida which is
part of a three-state swing to quiet critics who have said that he did not act
quickly enough to aid borrowers at risk of defaulting as their home values dropped
and their interest rates reset.
The Treasury Secretary, however, did not address other limits on the GSE's
lending ability. Freddie and Fannie are both working under caps on their portfolios
which they say are hampering their ability to assist borrowers and lenders in
the current credit crisis. Under the current rules Freddie and Fannie can facilitate
the sale of mortgage loans to secondary market investors but cannot keep loans
for their own portfolios above a level tied to their capital reserves. At first
glance it would seem that increasing the limits on individual loans would mean
that the GSE's would be able to fund fewer loans before hitting those
portfolio caps.
The Treasury chief rejected recent suggestions by former Fed Chairman Alan Greenspan
that government money be used to rescue Americans at risk of losing their homes.
"This program is attempting to prevent a market failure and do so without
government money," he said. "We are not touching the contracts in place."
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Comments (6)
| I dont know where you all live, but where I live the only house you can buy with the current limits are for the people with poor credit anyways. We have to pay about 750k for a nice home.(3000ft. 4 bed 21/2 bath) I dont believe we should be financing super homes, but why should we have to pay over 7% when they pay 6% or less. 1% difference pays for half of the prop. tax on the place. It makes a difference to us too! |
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| Above Posted By:
Alex
| Tue, 8 Jul 2008 05:09:20 EST |
| Yes, it IS about time to raise the GSE limits. The secondary market is pretty much non existant right now... they aren't buying good loans OR bad loans. The lenders are depleting their liquidity by keeping these jumbos on their books, and soon, even the most eligible and deserving borrowers are going to have even more difficulty purchasing or refinancing. The ROE on government loans is nowhere near what it is when they are sold to secondary, but at least it's something... |
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| Above Posted By:
mortgage chic
| Sun, 6 Jan 2008 22:01:19 EST |
| The GSE charter was for affordable housing, not bailing out private banks at the tax payers expense on million dollar loans. The market needs even more artifically cheap loans like a drunk needs more booze. Its policies like these that make housing prices high in the first place, and now they want inflate prices even more? |
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| Above Posted By:
Austrian School
| Sat, 22 Dec 2007 09:51:45 EST |
| This is another bad idea. If a loan is worth writing then the private sector will do it. All this does is to allow more bad loans to be guaranteed by the U.S. tax payer.
In my opinion they should close all of these government (Tax Payer guaranteed) programs before they become defaulting loan garbage dumps!
The loan underwriting will only change if there is no bailout! |
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| Above Posted By:
reality
| Fri, 21 Dec 2007 21:00:36 EST |
| Oh goodie! Just what I wanted for Christmas to pay for someone else's million dollar home.
To the commenter above, get a clue, if the money to purchase these homes isn't available the prices will have to come down. |
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| Above Posted By:
Anonymous
| Fri, 21 Dec 2007 15:57:03 EST |
| It is about time for them to start thinking about this, but they should stop thinking and do it!
California should be a high market state and the limits should reflect this. |
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| Above Posted By:
Connie
| Fri, 21 Dec 2007 11:34:05 EST |
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