Big Fee Increases Coming From Fannie Mae & Feddie Mac

I just read a news article that both Fannie Mae and Freddie Mac are planning on toughening up their credit score and downpayment rules.  As of April 1, they will implement new guidelines for loans backed by them.  The new guidelines will require buyers that are putting down less then 25% for a downpayment to be charged a penalty of 3/4 of a point (a point equals 1% of the loan amount).  It won’t matter what the buyer’s credit score is, if they are putting less then 25% down for a mortgage loan, they will be penalized 3/4 (0.75%) of a point.

Buyers of duplexes, where one unit is owner-occupied and the other is rented, will be charged a 1 percent add-on as a penalty, while those who are refinancing their homes and who plan to take cash out will be charged as much as three points if they have a low to moderate equity stake in their homes.

Many major lenders are already factoring in these higher fees, which reduces the effectiveness of the stimulus efforts.  Brad German, Freddie Mac’s spokesman,  said that the loan categories & credit risk combinations targeted by these fees “default at four to eight times” the rate of other mortgages that were backed by Freddie Mac. The reason for these fees, according to German, “We have to manage these risks appropriately,”.

So, if you are seriously planning to buy a home, this may be an ideal time to make that offer on that special home, get under contract, and settled before your mortgage loan includes these new fees and charges.  If you haven’t found that new home, yet…don’t delay!  Call us NOW at 609-417-1084 so we can help you find that special new home in record time and get you moved in.

Linda & Terry Iwaniw
REALTOR Associates
First Time Home Buyer Specialist
Marketers of HUD Owned Homes
ReSales & Investment Realty, LLC
856-795-3111 x263
609-417-1084
http://www.snewjerseyhomes.com/

Tags: buyer credit, buyers, credit, credit risk, Fannie Mae, fees, Freddie Mac, loan defaults, loan limits, mortgage loans, mortgages, points

Did you hear the latest news? Senate OKs $15,000 tax break for homebuyers

The housing industry should get a big boost from the latest addition to the stimulus bill that is working its way through the  Congress.  On Wednesday, Senators approved a proposal that would give home buyers a tax credit of 10% of the value of new or existing residences, up to a $15,000 limit. The current law, that was passed last year, provides for a $7,500 tax break and only for first-time homebuyers.

Sen. Johnny Isakson, (R-Georgia) said “It is time to fix housing first.”  Isakson’s office said the proposal would cost the government an estimated $19 billion. In all, the stimulus is now topping an estimated $920 billion.

President Barack Obama, in an op-ed that appears in Thursday’s Washington Post, painted a dire picture if Congress fails to move quickly to pass the stimulus bill.  “This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse,” Obama wrote in the op-ed titled, “The Action Americans Need.“

Tags: attracting buyers, buyer credit, congress, Housing, housing market, obama, stimulus, tax breaks, tax credit