Home-buyers should know this…
Congress wants their money back from their 2008 bailout…and a little premature if you ask me. But, Home-buyers, here me now…loan fees will go up. Congress is likely to approve a fee hike to recoup an estimated 38 Billion.
All signs point to Congress approving an increase for fees that Fannie Mae and Freddie Mac charge to banks to guarantee loans. These fees will ultimately be passed on to the home-buyer. Being that the rates are historically low to begin with, I doubt that the hike will seek much opposition.
Yet, the big debate is that this increased revenue for the government will not go back to support the housing industry. Instead, this money will be used to keep the payroll tax cut. And after speaking Nick Timiraos with WSJ, I learned that Congress is structuring this deal in such a way that these fees will not be considered a reimbursement of the 150 billion dollar bailout. So, let me get this straight…the Treasury is going to take 38 billion from Fannie and Freddie, but they are not going to write down their loan? Answer: yep.
To read more about this new policy, check out Diana Olick’s article.