Dennis' Mortgage Blog

So while on hold we listen to soft instrumental versions of  "Yesterday", "Sweet Caroline" and "Wendy".  What are we holding for? Congress, Fannie Mae, Freddie Mac and HUD to name a few.  Since the subprime meltdown started earlier this year, reaching crescendo in the media in October, building from August, we heard hundreds of sound bytes, read thousands of statements and have been promised many things.  But still we wait on hold, quietly humming, "...I write the songs that make...."

Some legislation has passed through the House and is in Senate committee that is trying to focus "blame" or at least "accountability" on the shoulders of mortgage brokers, but it probably will not get passed before the end of the year.  Some noise has been made about changes in HUD guidelines and maximum loan amounts for FHA and conforming mortgages--but we have not seen anything at this point.  There has been talk of revising IRS penalties for foreclosure and forgiveness of principal--but we still whistle along on hold.

Dennis

 Tuesday, November 20, 2007

This week news is coming out that both Fannie Mae and Freddie Mac are facing major accounting adjustments and capitalization issues--essentially Freddie may be out of the lending business very soon.  This brother and sister tandem are responsible for the bulk of mortgages in the United States, and many are looking to higher loan limits for them to help out those with adjustable loans about to jump to higher rates.  If their issues are not settled soon we may look back to the credit crunch of 2007 as a mere inconvenience compared to what the failure or incapacity of Fannie and/or Freddie would mean.

Take me off hold, stop the music, either get out of the way of the markets and stop fiddling with legislation or pass something so we can adjust and move forward.  Most importantly, raise the loan limits!