Three years and $141 billion of taxpayer money later, the first financial institutions to be rescued by the federal government, Fannie Mae and Freddie Mac, remain in conservatorship under the Federal Housing Finance Agency. The uncertain resolution of these government-controlled goliaths, which still dominate what is left of the mortgage finance business, is keeping most private sources of capital at bay. The FHFA acting director, Ed DeMarco, has a statutory duty “to conserve the assets” of the two entities. He is not a housing czar empowered to reform a broken market. Nor can he provide backdoor fiscal stimulus by sanctioning outright principal reductions on underwater mortgages, if these reductions would create greater losses to Fannie and Freddie.
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The lowest mortgage rates have ever been was around Thanksgiving 2012 when the interest rate for a 30-year fixed-rate mortgage fell to 3.31% (according to Freddie Mac data), but rising panic over the coronavirus could drive rates to lows never seen before. HW+ Premium Content
Effective January 3, 2022, the mortgage industry will cease using the long-standing LIBOR and, instead, adopt the new Secured Overnight Funding Rate (SOFR). With billions of dollars in ARM assets tied to the LIBOR index, this will have huge implications for the mortgage industry – and the consumers it serves.