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Economic News

Zero point mortgages- Federal Reserve turns housing upside down

Effecive April, 1, 2011, unless stopped by a filed lawsuit, the Federal Reserve will implement a new way to pay people that originate mortgages who work for any institution. Specifically, it would fix that amount of money they could receive from a lender for giving you zero points but not limiting what they could make by charging you points.

What the Fed has done is say that they will limit the compensation on one side but allow for anarchy on the other. It makes no sense. Why take away America’s most important financing vehicle in the beginning of a recovery?

People may now have to come up with money for points instead of enjoying a slightly higher rate that they can afford and pay no points to get it.

For those that don’t know, points are a way to get a lower mortgage rate. Simple, think see-saw. Higher rate, lower or no points, lower rate, higher points.

Along with the higher cost of mortgages, the prohibited guidelines that the Mortgage Gestapo have been putting into effect, the higher monthly FHA premiums (1.1) that take hold next month, the HVCC-like 150% increase in appraisal costs due to AMCs and the lack of good, independent jumbo rates to move the American McMansion, we can assume any national housing recovery will only take 20 years to come around.

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Zero points…..the disaster starts April 1st.

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. Jason Howe via Facebook

    March 13, 2011 at 2:34 pm

    Bad choice of words, no???

  2. Steve Scott via Facebook

    March 13, 2011 at 5:12 pm

    It’s frustrating to watch the Banksters push mortgage brokers out of the way so they can ‘Capitalize’ on their handy work that caused the worst economy since the great depression.

  3. Coleen DeGroff

    March 14, 2011 at 11:15 am

    When are these too big to fail banksters going to prison?

  4. MH for Movoto

    March 14, 2011 at 2:17 pm

    1. wow. this is madness.
    2. Coleen, I like the way you think.
    3. Are we 100% certain this is not an April Fools’ joke?

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