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Mortage Banking Double Talk!

By
Real Estate Agent with FHAllen, Sonoma Country and Vintage

A major complaint I hear from my clients is that the two- tiered system the banks are using to price conformimg loans is just another method of gouging the public.Conforming loans, are those that can be sold to Fannie Mae, Freddie Mac and Ginnie Mae, the so-called government sponsored enterprizes"GSES." This past fall, the Congress raised the conformimg loan amount from $417,000 to $662,500 in high cost areas like Sonoma County in Northern California.The banks however have continued to change a higher interest rate on loans in excess of the $417,000, not withstanding the fact that loans up to the new limit $662,500 are just as secure and credit worthy since they can be sold to the "GSES." So when the banks claim that loans above the original conforming limit ($417,000) but below the new limit ($662,500) ARE SOMEHOW RISKIER they are just blowing SMOKE. What they ARE doing is restoring THEIR balance sheets by overcharging the home buying public, who, as tax-payers, have already contributed to the  multi-billionaire dollar bail out of the banking system. Talk about CHUTZPAH! Shades of Shylock. 

Now is not the time to be playing these games with the over-burdened home owning middle-class, on which the recovery of this economy will ultimately depend.

Posted by

Kathleen Bonham

Vintage Home Specialist

Healdsburg, Santa Rosa, Sebastopol

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