I spent Monday evening at the apartment of a First Time Home Buyer going through her initial RESPA disclosures. My client is young and nervous. She read the paperwork more thoroughly than I have ever seen in my 5 years of originating mortgages. She obviously understands the magnitude of the transaction. As she carefully read each page that she was about to sign, she asked many of the same questions I have heard time and time again.
Quite a bit of my business involves working with First Time Home Buyers. They are typically not the largest deals, and usually involve more work, but I truly enjoy the satisfaction of helping someone become a homeowner for the first time. I always tell them that they are welcome to call me at anytime with any questions they have. Often, I'll make a comment that they will probably have the same questions that everyone else asks, so don't be embarrassed about not knowing something.
Monday night, I was asked something in a way I had never been asked before... "Is this one of those Fannie Mae or Freddie Mac loans? I've been hearing a lot of bad things about them and do not want one of those loans". Her mortgage is an FHA mortgage. Though she knew the loan was through FHA, she did not know all of the nuances of FHA vs Freddie and Fannie.
Her concern about Fannie Mae and Freddie Mac causes me concern. Public perception of the mortgage industry and housing industry is tough enough, but this takes things to another level. Fear of specific banks, brokers, or programs is something we will always have. Fear of Fannie Mae and Freddie Mac scares me. Though the percentage may be declining, I heard yesterday that 42% of mortgages are currently going through these two sources. We need to hope someone can solve the problem quickly and the government can keep Freddie and Fannie afloat. In the meantime, we nee dto continue to calm the fears the media continues to cause.