Fannie Mae-No Politics (FNMA)

[Dallas66]

Before FnF existed, home mortgages were very hard to come by. One had to put down a huge down payment....typically 50% or more. The terms were anywhere from 3 - 5 years....longer if you were lucky...maybe as high as 10 years... with a balloon payment at the end. You would then either have to refinance if you couldn't come up with that balloon payment...if you could get someone to refinance without yet another huge down payment, or you lost your home. Fannie and Freddie brought stability and accessability to hopeful home owners. They brought the American dream to millions of people wanting to OWN a home and have a stable, reasonable, and expected payment plan that allowed them to plan their future, build equity in their home, and raise a family in comfortable middle class America.

Imagine today trying to buy a $400,000 home....put down 50%...then try to pay off the other $200k in 5 yrs.

That would hit you in the area of $3500 a month for principle and interest...then add on taxes and ins...and the cost to support the home as well with gas, elec, water/sewer...maint...etc.

I'm sure the probablility to refinance would be there, but what would the interest rate be in 5 years...then another 5 and so on.

The fixed rate 15-20-25-30 year mortgages that FnF support...no banks want to back them....not at the cost/risk we see today.