Fannie Mae-No Politics (FNMA)

[nats1]

did anyone say the purpose of this "surcharge" for Treasury to balance the budget for? ...(I bought in 1983 and the first rate I locked in was 13%).

Yeah - how is the fee going to help make housing more affordable?

I remember the 13% days. My wife wanted to buy a townhouse - this was before we got married. Getting a mortgage as a single women was hard but she had saved up something like 25% down (I think the price was something like $87K). I told her that there was bad news and good news. The bad news was the current mortgage rates were something like 14%. The good news was that the balance of the outstanding existing mortgage was assumable. We told the bank that she was putting 25% down, her dad was going to give her a second (he was happy to get the current rate to help fund his retirement) and assume the existing mortgage. The bank went nuts as the existing mortgage was something like 7.5% and refused to do this - until I pointed out to them that the loan was clearly and unambiguously assumable. (It was a regular conventional fixed rate 30 year loan)

Why was it assumable? The mortgage was silent on the assumption issue and the rule was that, unless it said you can't, you can - if you are qualified. So the bank reluctantly said ok.

What happened was that mortgage rates went up sharply in the 70s and early 80s or thereabouts. So the banks automatically started putting in non and/or conditional assumption clauses on conventional loans.

Nats