The California Association of Realtors (CAR) voiced its support of enabling homebuyers to assume Fannie Mae and Freddie Mac-backed fixed-rate mortgages.
Bill Pulte, the director of the Federal Housing Finance Agency, used his personal X account last week to declare that his agency was evaluating the possibility of adapting assumable mortgages for loans backed by Fannie Mae and Freddie Mac, although he offered no specific details on when or how this would work.
Fixed-rate mortgages backed by the government-sponsored enterprises include “due-on-sale” clause, which requires the loan to be paid in full upon the sale of the property. In contrast, government-backed Federal Housing Administration and Department of Veteran Affairs mortgage loans are assumable for qualified buyers with lender approval.
In a statement, the organization said, “As mortgage rates have risen sharply in recent years, assumable loans could play a key role in unlocking housing opportunities for buyers. By allowing buyers to take over a seller’s existing low-rate mortgage, these loans can ease financial pressure and make homeownership more attainable.”
Personally very great idea…offering opportunites for buyers that are now locked out of the market and for home owners wishing to relocate, sale or etc….
more sensible than a fifty (50) year mortage with average of buyers now at forty (40) years of age … would be ninety years paying mortgage???? ridiculous.
I agree with Alyce in every respect. This makes much more sense than a 50 year mortgage regardless of who else (Europeans) may be doing it. Remember they brought us “Peace in our time” which led to World War II.
They have different reasons for why they have 50 year mortgages (which are still not good reasons), but going all the way back to Neville Chamberlain to insult Britain is kind of hilarious.
The U.S. started two unnecessary wars in the Middle East, costing us trillions to not-even-kill one dude on dialysis in a cave in the desert and fix “daddy’s mistake”.
We can make one case without losing face on another, can we not?
I have been saying this to anyone who will listen! Bring it on.
Love this, as long as seller is granted a release of liability.
a lender can certainly decide on credit standards for a different party assuming any loan in it’s portfolio. It may not be so simple for Fannie & Freddie to declare all loans to be assumable as VA has established criteria for a Veterans’ eligibility and a credit score requirement. This may be out there to divert attention from the 50 year proposal, and neither of these is likely to significantly lower the cost of housing for the American public.
I’ve been suggesting this to all that will listen. Problem is buyer still lack the enormous cash needed to assume the existing loan.
Develop a 2nd mortgage program for a CLTV of up to 95% to help buyers get in for the same low 5% down and WATCH THINGS ROLL AGAIN! Like an 80-15-5 or 70-25-5 on a case by case basis.
At least Trump is trying to fix the housing market. Biden’s term only brought ridiculous interest rates, high inflation and no solutions for homebuyers. coming up with any type of solution is better than none at all.
In better days, 3-5 years (in my market) was the average amount of time that new buyers spent in a 1st home.
I love the assumable (and/or portable) mortgage idea but why not both?
I would prefer the mortgage (and rate) stay with the BORROWER and the property securing the mortgage be allowed to change to the new home the buyer who secured the original mortgage is buying.
I believe a low rate mortgage staying with the home would not motivate the seller to move – would still lose their low rate.
Also believe the low rate staying with the mortgaged property will simply increase the price someone is willing to pay for the property- simply because it has a low rate mortgage. No win for the buyer there…..
Both options – depending on the remaining mortgage balance, and the equity a seller or buyer has -could most likely require a second mortgage to cover the difference between the remaining mortgage balance, price of the property, and cash available to the buyer.
Fannie and Freddie have to push this, because the lenders will never do it on their own. (Just remember, it is kind of socialism then, kids!)
Why would a lender give up the full-blown new mortgage to be repackaged before the digital ink is even dry for…a transfer fee? I mean, it is great for our clients, obviously and never should have stopped being a ‘thing’, but…you are going to hear whining from the lenders from coast to coast. Now…that idiotic 50 year mortgage idea? They all CLAIM they hate it, it’s a bad idea…but magically, you can see them posting on social media about it with rates and payment comparisons, despite it not even being a thing yet.
Weird…right?
lol ..never going to happen….the low rates should of never happen….they really want the low rates to go away at the sale. average home owner sells every 7 to 10 years….that’s what they want…. people never really pay on the principal. interest only is the bankers and wall streets dream for home owners.