Is Congress adding costs to your new mortgage?

Educate Yourself on Costs 
In today’s economy, it is important for consumers to be educated about any upcoming changes that could impact the Albuquerque area real estate market. One such concern is bill HR 6429 which was just passed by Congress. This bill is essentially an immigration reform bill, but in order to pay for the costs associated with the program GSE fees were attached to Fannie Mae and Freddie Mac mortgages.

“Basically what this means,” Ben Lucero of Indigo Mortgages states, “is American consumers buying or refinancing their homes will be paying for immigration reforms through higher interest rates and fees on mortgages.”

Because it takes money out of the pockets of people buying or refinancing their homes, the bill has not been favorably received by the mortgage industry. The National Mortgage Brokers Association, as well as the National Bankers Association, oppose the bill—not because of its implications for immigration reform—but because it calls for the use of housing to fund it. In an already shaky housing market, the extra fees are seen as potentially risky for the continued recovery of the housing market.

David Steven, president and CEO of the National Bankers Association was quoted in DSnews.com as saying: “Fannie and Freddie’s guarantee fees are supposed to be used to help offset the risk inherent in providing mortgages, and any increases to those fees should be used for that purpose,” Steven said. “Dipping back into the housing piggybank to pay for unrelated policy items on the backs of America’s homeowners sends the wrong message at a time when the housing market is starting to show signs of recovery.” He went on to say, “Increasing the cost of most mortgages will only add to the uncertainty that is plaguing the mortgage market and deferring a more a robust housing recovery.”

Fortunately, bill HR 6429 still has to pass the senate before it can be implemented.  Please check back because we will be posting the bill in the next few days for your review.