...is that it asks the wrong question. The issue is not what would happen to rates without the Fed backstop to Fannie/Freddie, but whether there would be fixed rate mortgages at all.
30-year-fixed rated-80-percent-loan-to-value mortgages beyond the conforming loan limit basically do not exist at the moment [update: by conforming loan limit, I mean the high cost area loan limit, which in some places is now $729,750]. A conversation I had today with two bank executives confirmed this. Some would argue that 30-year fixed rate mortgages are over-rated, but not I.
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As a taxpayer, I am truly tired of bailing out these worthless Fannie/Freddie borrowers. I could care less what mortgage terms they get. Let them borrow money from overseas without taxpayer guarantees and bailouts.
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Worthless Fannie/Freddie borrowers? I take you are a renter, since otherwise you're probably a Fannie/Freddie borrower.
It's my understanding that 30 year fixed rate mortgages were created in the '30s with the birth of Fannie Mae (and if my memory serves me correctly of the FHA and Ginnie Mae).
Your link about the inadvisability of the 30-year mortgage seemed pretty convincing to me. Why do you think 30 year mortgages are a worthy financial investment?
Not true: www.msbmortgage.com/ratestable.asp
Jumbo rates on 30-year fixed are 5.5%. You just need to find a real bank.
People said that Fannie and Freddie had an unfair edge as they sought to borrow funds because of the implicit Federal guarantee.
But we have learned that they did not have an unfair edge because the Federal government also provided its implicit guarantee to many other banks, lending institutions, and other businesses.
Seriously, can you imaging the value that would add to a home down the road if inflation ever does take hold? I am not positive, but I thought FHA and VA loan were assumable; and with so many FHA loan being underwritten, this should bode well for many. Miami real estate
I just punched in $800,000 purchase loan at both BofA and Wells' websites, for my county, and both returned (reasonable) quotes for 30 year fixed. If they were non-existent, they wouldn't be quoting rates. Doing the same this time a year ago either returned no quotes, or rates that were clearly pricing themselves out of the market.
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