New fees are proposed for Government Backed or Insured Loans

The new design of Fannie and Freddie, when or if that happens, may require fees get charged for any federally backed loans – and it’s about time…The trick will be to charge a fee sufficient to cover the Government losses and not perceived as charging too much.  It was interesting to note that until recently, FHA had turned a profit.

Some suggest private lenders form a cooperative of sorts and pay fees into a “mutualized loss pool” to provide guarantees for mortgages.  In addition, pay a “reinsurance” fee to the Government as additional insurance for additional losses.

It is interesting to note that almost $10 Trillion of mortgages have been created over the past 30 years which seems to have outpaced the “capacity” of the nation’s banking system.

Source:  WSJ, 8-24-2010 page A6.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them.

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply