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Mortgage market post Fannie/Freddie

The phase-out proposal also calls for a more limited role for the Federal Housing Administration, the insurer of low-down-payment mortgages that have grown popular among first-time buyers and those with weak credit or low income. It suggests raising the minimum down payment to 10 percent from 3.5 percent, and imposing that 10 percent minimum for Fannie and Freddie loans. F.H.A. is raising the mortgage insurance premium already -- it is set to increase next month, to 1.1 or 1.15 percent of the loan amount for 30-year fixed-rate loans. The agency was considering a jump to 2.25 percent.

The proposal also calls for lowering the size of loans that Fannie Mae and Freddie Mac can insure; the limit, for loans in high-cost areas, is already set to drop, on Oct. 1, to $625,500 from $729,750. Larger, "jumbo" loans typically carry higher rates.

Hey, S.E.C., That Escape Hatch Is Still Open
Published: March 5, 2011
Although the S.E.C. calls itself "the investor's advocate," it's still not enforcing a rule governing credit ratings agencies.

A Plan to Phase Out Fannie Mae and Freddie Mac
Published: March 3, 2011
A government proposal is currently in draft form, but industry experts say it will most likely affect borrowers even before it is finalized.


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