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20% Down For Mortgages Coming to a Lender Near You!

Real Estate Agent with Real Estate Teams LLC

Your Distressed Property and Short Sale Expert in Maryland

Federal Regulators from the FDIC and the FED, have proposed that in the future, home buyers, even those with the best credit, will usually need to have a 20% down payment to purchase a home.
This is a reaction to the financial crisis we are still struggling with, that ruined many people's financial lives.
This idea could become official as soon as this summer, but would have limited effect since government entities are still insuring home mortgages through Fannie Mae, Freddie Mac, VA, FHA, and USDA.

However, Federal officials plan to wind down Freddie and Fannie, while gradually bringing FHA loans closer to the proposal.

How do they plan to make this work?  By charging banks higher fees and reducing the competative advantage F&F have over banks. Banks will also need to retain at least 5% of the risk on each mortgage, even if they resell them. This should reduce the risky lending banks did in previous years, and which led to the economic calamity. And, with less risk, banks are more likely to return to the mortgage lending business.

Some on Wall Street feel just the opposite will happen - that banks will be reluctent to make loans not backed by the government which would increase the Government's position in the market.

House Republicans have a different idea - require Fannie and Freddie to begin selling their portfolios to increase liquidity, and raise fees and change other advantages that make F&F less, competative compared to banks.

Do you think Freddie and Freddie should go away?
Which plan do you think will work best?
Will the housing market work with 20% down payments and the banks lending to home buyers?

* Helping first time home buyers, investors, and sellers
* Keeping People From Experiencing Foreclosure
* Helping uniformed members, and veterans, find homes