One recent December 2012 WSJ article mentioned that President Obama recommended Fannie & Freddie help refi “private” (non governmental – i.e., FHA, Fannie or Freddie) underwater mortgages – which places the possible loss against US taxpayers.
In a separate WSJ article on October 29, 2012, the National Association of Insurance Commissioners agreed to require a 33% increase of reserves (up to $800 million) for losses against failed non governmental (i.e., FHA, Fannie or Freddie) mortgages.
So who will take the risk of loss and on what % of non governmental mortgages when they fail – taxpayers or insurers?
So will the insurance rates across the country rise to allow the extra reserves be collected? Or will Obama get his way and approval from Congress to let the taxpayer assume the risk of most mortgages and force the insurers to not raise the rates to compensate for the losses that may not occur if the Obama proposal is implemented?
State Legislatures & Insurance Commissioners ought to be paying attention to this as well and ensure the rise in homeowner’s insurance doesn’t overcharge us for a loss they may not incur!