A large majority of consumers say they want U.S. mortgage giants Freddie Mac and Fannie Mae to halt buying mortgages, according to a new survey.
WASHINGTON, D.C. – April 3, 2012 – (RealEstateRama) — The opinion poll, conducted by Housing Predictor found that 72% of respondents want the firms, which act as a back-stop for the nation’s mortgage market to stop purchasing home loans from banks and mortgage lenders. Only 28% said they should keep buying home loans.
The two government giants have been bailed out by tax payers at a cost exceeding $184 billion for failed mortgages it purchased during the real estate bubble. Fannie and Freddie were taken over by government authorities four years ago, and since then proposals have been made to repair the government enterprises.
The Federal Housing Finance Agency (FHFA) was formed by the Obama administration to oversee the lending giants. But Congress has failed to reach an agreement to repair or replace the lenders, despite a series of proposals offered by a legion of Congressional leaders.
In the mean time, an estimated 85% of U.S. mortgages being underwritten in the current financial climate are being purchased by the two government lenders. Financial analysts are concerned about how the nation’s mortgage market would do if the mortgage giants halted buying loans from lenders. Fannie and Freddie purchase the loans and then re-sell them as securities to investors.
Commercial banks and savings and loans lent to borrowers much more aggressively before the financial crisis in 2008. But a series of bank failures and the foreclosure crisis has led to a slowdown in mortgage lending. Lenders are requiring higher credit scores and proof of income to make home loans with higher down payments.
Housing Predictor regularly surveys consumers on issues closely related to the real estate industry, monitors and issues forecasts on more than 230 U.S. cities housing markets and offers the latest mortgage rates and real estate news.