2023 conforming loan limits have been announced! The Federal Housing Finance Agency (FHFA) sets the loan size limits each year on conventional mortgages that Freddie Mac or Fannie Mae will buy from mortgage lenders. In 2022 the conforming loan limit for a single-family home was $647,800. This year, the conforming loan limit for a single-family home has increased to $726,200, a little over a 12% increase!
Blog Category: Freddie Mac
The Home Affordable Refinance Program (HARP) is a mortgage assistance program, set up by the Federal Housing Finance Agency in March 2009 to help underwater and near-underwater homeowners refinance their mortgages.
After the housing market crash in 2009 many homeowners were faced with a situation where their house was considered “underwater”. In this scenario, the house value was less than the mortgage loan cost, in other words, having a negative equity value in the home. Refinancing was not an option, nor was selling the home unless they paid the lender for the difference. Unfortunately, this lead many homeowners into foreclosure.
There are increases coming to mortgage interest rates due to several rule changes. One change is a proposed increase in the guarantee fees, also called the g-fees. This fee will increase 10 basis points, which is equal to 1/10th%. There are also increases coming to what I call add-ons. Add-ons are fees charged by Fannie Mae and Freddie Mac, that vary depending on credit score and down payment of each mortgage borrower.
Often times when a buyer and seller are negotiating over the sale of a home, the buyer indicates they would like to have certain personal property from the home. There are times when the seller is OK with that, either due to not wanting those items, or wanting the buyer to have them to help facilitate the sale.
However, there is a problem with this. The problem with including personal items like furniture, rugs, chandeliers, a pool table, and these sorts of personal items is that once they are written into the contract they inherently have value. Yet, the document being used to buy and sell real estate is a real estate contract, also used to contractually bind parties in a real estate transaction; it is not supposed to be a pool table contract!
FHFA is the Federal Housing Finance Agency. They regulate Fannie Mae and Freddie Mac. FHFA just announced another round of Fannie Mae and Freddie Mac guaranty fee increases. These are the fees that Fannie and Freddie charge lenders to guarantee loans, and of course Fannie and Freddie have the backing of the U.S. government. Without this federal backing, Fannie and Freddie would not exist, or they certainly would not exist in the size and scope they have over decades and decades.
The Treasury Department last week altered its financial support of Fannie Mae and Freddie Mac. The revised terms are that the guarantees of how much the Feds will back them are going down, but officials say the amounts they are still guaranteeing will be plenty. More importantly, there will now be no dividend that Fannie Mae and Freddie Mac has to pay. The new terms are that whenever there are profits they will simply be swept over to the Feds; and losses will still be covered by we the people.
Prior to this change, since there have been no profits for the most part in the last four years since this takeover of Fannie and Freddie began, Fannie and Freddie have had to borrow money from the Treasury (i.e. we taxpayers) to make their dividend payment. Now the requirement
I am from the government and I am here to help you. That punch line seems to be coming more and more true these days. Fannie Mae and Freddie Mac were taken over by the federal government in bankruptcy receivership in 2008. Fannie Mae and Freddie Mac, along with FHA and VA make up almost 100% of mortgage lending in our country. I would not say that the mortgage industry has been socialized, but it certainly is dominated by government. In the last four years the big government stamp on the mortgage process is undeniable and is the sole reason people scream bloody murder at their mortgage lenders during the process. Below are some exact reasons you can thank the Feds for your mortgage nightmares:
I just heard that FHFA (Federal Housing Finance Agency) has implemented a hike to the Fannie Mae/Freddie Mac guarantee fee. This is the fee that the GSE’s (Government Sponsored Enterprises) which are now actually GOE’s (Government Owned Enterprises) pays to the government for their backing. They raised this fee to pay for the Temporary Payroll Tax Cut, signed by President Obama! The announcement said specifically: