CRSmiami.com:- Considering Buying a House? , Do it Pronto

May 24, 2011 - PRLog -- (http://www.mortgagelendingnews.com)  There are plans that would remove the federal government from the lending mortgage business which will have a big hit on Fannie Mae and Freddie Mac, which will produce percussion on homebuyers too.  This projection could mean more expensive mortgages, higher fees, larger down-payments and possibly higher interest rates.

The speculation on Fannie Mae and Freddie Mac is that America requires finding ways to begin the process of attracting private capital back in and to having the government be in more of a re-insurance position.

Additionally, Congress will not to pass new legislation continuing a provision that allows Fannie and Freddie to buy mortgages with values as high as $729,750, the level to which it was raised in 2008. Without action by Congress, the limit on loans that Fannie and Freddie can buy will drop back to a maximum of $625,500 effective in September.

According to the proposal, loans sold to Fannie Mae and Freddie Mac would carry no risk-retention requirement as long as the two firms remained in government conservatorship. As a result loans sold to Fannie and Freddie wouldn't have to meet new underwriting standards for exemption to the risk retention rule set out in the proposal.

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Nearly 90% of all new home loans made today are sold to Fannie and Freddie and legislative efforts to dismantle and replace the two firms are still in the early stages, but they are coming.

In the long run, should all the proposals come into play, a healthier housing market should appear, says some analysts. The most sweeping message of the proposals is that the government will not help every American buy a home.  Perhaps that's a good thing, but it will have short to mid-term affect on the housing market, interest rates, fees and mortgage insurance.

By: Dina Montoya, Editor
Corporate Asset Management
Miami, FL

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