In a time where our housing marketing is not out the woods and many who want to keep their home are having a difficult time refinancing; the Obama Administration released their proposal for "winding down" Fannie Mae and Freddie Mac.  They plan on phasing the government out of the GSEs over the next 5 to 7 years.  

Here are some of the highlights of the reform plan as released by the Treasury Department on Friday:

Phasing in Increased Pricing at Fannie Mae and Freddie Mac to "level the playing field".  The Obama Administration believes that if they increase conventional mortgage rates, it will help private lending have a fair chance at originating mortgage loans.  If you've been reading my blog, you know that Fannie and Freddie have been increasing their pricing by their LLPA's (Loan Level Price Adjustments).   Adjustments to pricing translates to higher mortgage rates in addition to what the market pricing would be.  Higher rates means that Seattle area home buyers and those seeking to refinance will qualify for less.

Reducing Conforming Loan Limits.  Currently in King, Pierce and Snohomish counties, we have a temporary high balance conforming loan limit of $567,500.  This plan confirms the governments intent to "rest as scheduled on October 1, 2011 to levels set in the Housing and Economic Recovery Act (HERA).

Phasing in Minimum 10% Down Payment.  In my opinion, this isn't a huge deal for Fannie and Freddie mortgages…as long as we still have FHA.   Speaking of FHA…

"Returning FHA to its Traditional Role".   FHA has become the mortgage du jour in many cases when a borrower doesn't have 20% down payment…you never know what you're going to get with a PMI underwriter.   The Administrations proposal for FHA includes:

• allowing current high balance loan limits to expire on October 1, 2011
• increase the annual mortgage insurance (again) by 0.25 basis points
• "lowering the maximum loan to value ratios…and adjusting pricing".  FHA plans on increasing the minimum down payment from 3.5%.

Increased mortgage disclosures for consumers.  What happened to simplifying the process?  I've found that HUD's Good Faith Estimate and the Fed's Truth in Lending have not helped consumers.  New disclosures are being worked on and hopefully what ever our government creates, will be more clear and concise than what I've seen.

Here is the entire 32 page Reforming America's Housing Finance Market – A Report to Congress.

 
My father, Ron Christopherson, passed away Friday afternoon, just as the beautiful sun was setting.   He was only 64 years old and had been suffering from several heath issues, including cancer.  I am thankful that he is no longer in pain and my little sisters and I miss him terribly.

I will be taking a few days off as we plan for his services.

Happy Thanksgiving to you and your family from ours.

 
Mortgage Master Service Corporation is closed today and tomorrow.  We will reopen for business as usual on Monday, November 29, 2010.  

Today we thank and remember those who have served our country.  

Mortgage Master Service Corporation is closed in observance of Veterans Day today.  We will re-open for business as usual on Friday, November 12, 2010.

Hat tip to my mother-in-law, Ruth Porter, for the Kiss video!

Mortgage Master Service Corporation is closed today in observance of Labor Day and will reopen for business as usual on Tuesday morning.

Labor Day was first celebrated in 1882.  From the United Stated Department of Labor:

Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.   

Last week, Christina Romer, the recently resigned White House Chair of Economic Advisors, stated

"We have tools that would bring unemployment down without worsening our long-run fiscal outlook, if we can only find the will and wisdom to use them".  

Read her entire prepared statement here.

During this Labor Day, I hope that those who are unemployed or under-employed find "labor" soon.  

And on a Sunday…

In observance of Easter, Mortgage Master is closing at 1:00 pm today. 

We will be reopening for business as usual on Monday, April 5, 2010.

Happy Easter