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It’s Unofficial! No More Fannie or Freddie!

Fannie Freddie

I see a pattern.  You may see it too.

Notice that FHA has made a few subtle changes that will allow originating brokerage companies not to be put through the ringer to get a Mini-Eagle?

They can now be VA-like sponsored by a lender that has a net worth of over $2,500,000 thereby removing small to medium sized, service oriented mortgage bankers from the FHA world.

What does that mean?

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The big boys (aka banks) will dominate the FHA market, set higher prices for consumers but to their luck or skill or both will now have the government insure the mortgage!

I am an absolute proponent of government backed mortgages (along with an MI-like fee for each loan to pay off the bad future debt).  But it looks like it is being done under an agency that is just not set up to do it.

If this continues, Fannie and Freddie become totally irrelevant.  Why would you sell loans to the Big 2 of conventional loans without the G-Men giving you the insurance.

It’s all a far-conservative cluster funk that still let’s people with lower scores get approved with 3.5% down that they get as a gift but won’t approved someone for a refi with a 750 score, great debt-to-income ratio who has 6.5% because they have negative equity.

A pattern of morons.

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Written By

Realty Reality! That describes Fred, a sharp witted and outspoken realist for the mortgage and real estate world who has appeared on CNBC and NPR's Marketplace along with being quoted in the New York Times, The Wall Street Journal and other media outlets. Fred is the CEO of U S Spaces, Inc/Arrivva (a real estate brokerage firm in PA, NJ, DE and CA) and U S Loans Mortgage Inc (mortgage brokerage in PA, CA, FL and VA), and serves on the Board of Directors and is the Federal Legislative Director for the UpFront Mortgage Brokers. Fred is also the co-creator of real estate startup, a mathematically driven rental search engine. See everything Fred at



  1. Paula Henry

    December 1, 2009 at 6:21 pm

    Fred – Your last sentence is a perfect summary!

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