I've been curious how most of the sub-prime mortgage crisis is going to be funded. In other words, who is going to pay for the failings of the sub-prime mortgage companies. We've heard a lot in the news lately. There has been lots of talk around whether or not the government would step in and cover these losses.
Well, I had a rude awakening the other day. Dayna and I have decided to pursue a mortgage on a new house. I set up an appointment with our trusted lender at Valley National Bank. Lynn Majors at VNB was very good to us when we refinanced our existing home and, as a result, I wanted to give her our repeat business.
As Lynn was working up the Good Faith Estimate, she was walking through the closing costs with me. Turns out that Fannie Mae ( FNMA ) has decided to gracefully allow the rest of us with good clean records to finance the sub-prime crisis. YES!!! This nice new fee within everyone's closing costs now is not a trivial $20 or $30 bucks. FNMA lobbed a nice big fat fee of $420 onto our closing costs specifically for finding the sub-prime problem. And, mark my word, I bet once the crisis is over and paid for that good ol FNMA just decides to keep that fee on all mortgages.
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