"With rates too high to make buying a home palatable, or even possible, we have a housing market that has been variously described as frozen or sick. What is certain is that many people are depressed about missing out on the interest rates that existed in 2021, and they fear that rates will never get that low again. In the movie The Firm, Tom Cruise's character, Mitch McDeere, is in a Grisham-esque world of hurt,"
"As conservator of Fannie Mae and Freddie Mac, the FHFA could direct that from this point forward, all loans currently held by the GSEs are assumable. FHFA has emergency powers, and they flexed these norm-breaking muscles to delay foreclosures during Covid. If the president wants to invoke such powers again, Pulte should just declare that all loans held by the GSEs are now assumable. In other words, stop asking for a rate cut, and just deliver one."
Mortgage interest rates remain high, leaving many buyers priced out and nostalgic for 2021 rates. A recent Fed quarter-point cut produced little change in consumer mortgage rates. The FHFA, as conservator of Fannie Mae and Freddie Mac, has emergency powers previously used to delay foreclosures during Covid. The FHFA could direct that loans held by the GSEs be assumable, allowing buyers to assume existing low-rate mortgages. Assumable loans are established in VA and FHA programs and bind the loan to the property so the next buyer can take it over. Declaring GSE loans assumable could unlock a trillion-dollar inventory of sub-5% mortgages and quickly ease housing market strain.
Read at www.housingwire.com
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