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FHFA Publishes New Product Notice for Freddie Mac Second Mortgage Proposal
FOR IMMEDIATE RELEASE
4/16/2024
Washington, D.C. – Today, the Federal Housing Finance Agency (FHFA) sent to the Federal Register a notice of a proposed new product from Freddie Mac to begin purchasing certain single-family closed-end second mortgages.

“The proposed activity is intended to provide homeowners with a cost-effective alternative for accessing the equity in their homes,” said FHFA Director Sandra L. Thompson. “Reviewing and considering comments from the public will be a critical component of our review as the Agency exercises its statutory responsibility to evaluate new Enterprise products.”

Freddie Mac proposes to purchase closed-end second mortgages on properties for which it already holds the first mortgage. FHFA has determined this to be a new product that merits public notice and comment about whether it is in the public interest.

FHFA invites interested parties to provide written feedback on the proposed new product. Comments may be submitted via FHFA’s website or by email to RegComments@fhfa.gov .

Once the Federal Register publishes the notice, a statutory 30-day comment period begins. After that 30-day period has ended, FHFA has a statutory 30-day period to make a final decision as to whether to approve the proposed new product.

https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Publishes-New-Product-Notice-for-Freddie-Mac-Second-Mortgage-Proposal.aspx

Al_Sharpton_for_President says

“The proposed activity is intended to provide homeowners with a cost-effective alternative for accessing the equity in their homes,”

The only way to extract equity from a home is to sell it. What the FHFA clowns are really talking about are LOANS that must be qualified for that happen to use the house as collateral. Loans that must be paid back with interest.

SunnyvaleCA says

$31k/year for a 60 year old 3/2 of 1500 sq ft.

Which city in California is this in? I have friends who live in Corona, California. Beautiful weather most day of the year but I wonder if the taxes are worth it? Both are physicians, make good money, so money is not an issue for them.

I live in Cleveland, Ohio, weather sucks. So, good weather is valuable to me. Hope to move on from here but not sure where. I guess we will follow our kid to the city where he gets his job and decides to live, there is nothing like family, even the best weather pales in comparison.

HeadSet says

What the FHFA clowns are really talking about are LOANS that must be qualified for that happen to use the house as collateral. Loans that must be paid back with interest.

Yes, it serves the bankers’ interests. More loan issuance. But the homeowner? Cards maxed out, getting slayed by inflation, suck dry the equity via a second mortgage, default, lose home. Buh bye.

gabbar says

SunnyvaleCA says

$31k/year for a 60 year old 3/2 of 1500 sq ft.

Which city in California is this in? I have friends who live in Corona, California. Beautiful weather most day of the year but I wonder if the taxes are worth it? Both are physicians, make good money, so money is not an issue for them.

I live in Cleveland, Ohio, weather sucks. So, good weather is valuable to me. Hope to move on from here but not sure where. I guess we will follow our kid to the city where he gets his job and decides to live, there is nothing like family, even the best weather pales in comparison.

Likely Sunnyvale as the handle ;) When I moved to the bay area for the first time decades ago the highlander apartments on Iris were my first place to stay. Had a pretty hot goth/light bdsm chick who was training to become a firefighter as roommate. Ahh the memories. All you need in the south bay in your youth is a place with a pool and BBQ

SunnyvaleCA says

People recently buying shacks in my neighborhood already have taxes to the moon. $31k/year for a 60 year old 3/2 of 1500 sq ft. That pales compared to the $160k/year interest on their mortgage, but still.

Sunnyvale, do you think they made a large downpayment from their RSU's?

https://rudy.substack.com/p/we-fought-steins-law

https://nypost.com/2024/06/05/real-estate/number-of-us-homes-for-sale-is-slowly-returning-to-normal-an-incredible-trend-economists-say/

The number of US homes for sale is slowly returning to normal

https://finance.yahoo.com/news/home-prices-begin-to-come-down-in-pandemic-boomtowns-like-austin-tampa-090042087.html

Home prices begin to come down in pandemic boomtowns like Austin, Tampa

zzyzzx says

https://finance.yahoo.com/news/home-prices-begin-to-come-down-in-pandemic-boomtowns-like-austin-tampa-090042087.html

Home prices begin to come down in pandemic boomtowns like Austin, Tampa

Because most retired boomers with the ability to move did so already from northern states. Tampa is kind of shitty for Florida in my opinion. It's geezerville. Bland for FL and a bunch of dickhead New Yorkers.

I don't see Austin having a big downturn unless it's really gotten that overrun by Californians and native Texans want to get away from it. Though I think that's already happened. It's the Nashville of the South. Tourist shit hole. They already had massive homelessness 15 years ago. One of the few cities I've been to a lot in Texas for work. Haven't been in a while and no intentions to again.

https://rudy.substack.com/p/we-fought-steins-law

According to Melody Wright, delinquencies are now where they were in 2006.

https://youtu.be/P76tDfH1Sbg?si=TMgiXRiy3PYBgBSz

Where exactly does Brylski live?

GNL says

Where exactly does Brylski live?

In a $1.1 million home in New Orleans. She says it is $15,000 a year to insure. I think that is very high rate (around 1.5% of the home (replacement) value).

In the Florida panhandle I think the insurance annual rate is 0.6% of the home value.

https://www.fox8live.com/2024/06/19/new-orleans-woman-says-soaring-insurance-forcing-her-sell-11-million-uptown-home/

.

AD says

In a $1.1 million home in New Orleans. She says it is $15,000 a year to insure. I think that is very high rate (around 1.5% of the home (replacement) value).

Insurers are raising rates a lot, lately.

I have a friend in Fort Myers Florida. He’s going without insurance on a 450k home. Last week, the floods were almost to his front door literally.

He bought it as a foreclosure right before the hurricane hit. He had no insurance at that time also. He don’t care because the home needed renovations anyway. So far, he’s dodged 2 bullets.

gabbar says

SunnyvaleCA says

$31k/year for a 60 year old 3/2 of 1500 sq ft.

Which city in California is this in?

In Sunnyvale within walking distance to Apple's new spaceship campus.
Here's a recent example: https://www.zillow.com/homes/1448-dove-lane-94087_rb/19614150_zpid/

B.A.C.A.H. says

SunnyvaleCA says

People recently buying shacks in my neighborhood already have taxes to the moon. $31k/year for a 60 year old 3/2 of 1500 sq ft. That pales compared to the $160k/year interest on their mortgage, but still.

Sunnyvale, do you think they made a large downpayment from their RSU's?

Either a large downpayment from RSUs or from their parents. I think some people think this is like earlier times when a good strategy was to buy a house when mortgage prices were high (driving down house prices), struggle with the mortgage for a few years, and finally re-finance when interest rates are low and house prices zoom. This worked out well for me when I bought in 2004; original interest rate was something like 6% and I refinanced as low as 1.875% (I had several different 5/1 ARMs over time) while the price of the house shot up 4x. On the other hand, Apple stock price has shot up 100x.

UkraineIsTotallyFucked says

AD says

In a $1.1 million home in New Orleans. She says it is $15,000 a year to insure. I think that is very high rate (around 1.5% of the home (replacement) value).

Insurers are raising rates a lot, lately.

It’s crazy how much they have gone up, the actual rate/valuation percentage has more than doubled for us: 2017 was 0.213%, 2024 is 0.433%.

ForcedTQ says

It’s crazy how much they have gone up, the actual rate/valuation percentage has more than doubled for us: 2017 was 0.213%, 2024 is 0.433

This...along with property taxes.

UkraineIsTotallyFucked says

This...along with property taxes.

My yearly house property tax recently increased by $2000. Just part of inflation, as is the increase in property insurance. The county has to pay more for employees, materials, and contactors and the insurance companies have to pay inflated material and labor costs to settle claims.

https://wolfstreet.com/2024/06/21/home-sales-sag-further-hit-by-mortgage-rates-price-reductions-active-listings-surge-median-price-skewed-higher-by-surge-in-high-end-sales/

Around here, there is a shortage of home listed because people do not want to sell their homes. One major reason is this example:

Current home, $1,000,000 mortgage at 2% has a monthly payment of $3,696.
Downsize home, $750,000 mortgage at 7% has a monthly payment of $4,990.

Moving to a smaller home at today's interest rates actually can increase the monthly nut and that is after costs like realtor commission and loan origination fees.

https://lamag.com/real-estate/kanye-wests-mansion-loses-18-million-in-value

Kanye West's Mansion Loses $18 Million in Value

zzyzzx says

https://lamag.com/real-estate/kanye-wests-mansion-loses-18-million-in-value

Kanye West's Mansion Loses $18 Million in Value

This kind of stuff means nothing. These high-end mansions are not moving in sync with the rest of the market because these brain dead celebrity bimbos tend to overpay when they want something now-now-NOW!

HeadSet says

Around here, there is a shortage of home listed because people do not want to sell their homes. One major reason is this example:

Current home, $1,000,000 mortgage at 2% has a monthly payment of $3,696.
Downsize home, $750,000 mortgage at 7% has a monthly payment of $4,990.

Moving to a smaller home at today's interest rates actually can increase the monthly nut and that is after costs like realtor commission and loan origination fees.

At 7%, the move down house would have to have a $375,000 mortgage if the wanted to reduce their monthly payment by $1,300 instead of increase their monthly payment by $1,300. Wow, just wow.

zzyzzx says

https://lamag.com/real-estate/kanye-wests-mansion-loses-18-million-in-value

Kanye West's Mansion Loses $18 Million in Value

I still have no idea how he became a billionaire. Through tennis shoes?
Edit: yep, just looked it up...tennis shoes mostly. Yeezy.

Looking to move to a smaller place in Yuma and put the money we'll save towards travel and savings. The place we're currently in is a bit of a dream home, but we don't need so much space, and it's not very efficient when it comes to AC. Plus we don't use the pool that often, or have people over much. Even with being picky on location(won't move within two miles of any fields due to pesticide drift), there are a lot of options. The move will save us somewhere between $300 - $600 monthly.

Still wouldn't even think about buying. Renting is WAY cheaper...

https://www.cnbc.com/2024/06/25/the-typical-newly-built-house-in-the-us-is-shrinking.html

The typical new home in the U.S. is shrinking

FL Inventory up 70% YoY.

Eric Holder says

This kind of stuff means nothing. These high-end mansions are not moving in sync with the rest of the market because these brain dead celebrity bimbos tend to overpay when they want something now-now-NOW!

YEP

The median price was skewed by a surge in sales of higher-end homes.
According to the NAR, despite the overall decline in sales, the high end was hot:

Sales of homes of over $1,000,000: +22.6% YoY
Sales of homes of $750,000 to $1,000,000: +12.9% YoY
Sales of homes of $500,000 to 750,000: +6.9%
Sales of homes $250,000 to 500,000: +1.0%
Everything below fell.
So the mix of homes that sold changed toward the higher end, with relatively fewer sales in the mid-range to lower-end homes.

The median price is the price in the middle. And this shift in mix of what sells toward the higher end pushes up the middle of the prices that sold, and thereby the median price. This is an infamous shortcoming of the median price. We discussed the mechanics, including a chart, of how median home prices are skewed by changes in the mix here.

https://wolfstreet.com/2024/06/21/home-sales-sag-further-hit-by-mortgage-rates-price-reductions-active-listings-surge-median-price-skewed-higher-by-surge-in-high-end-sales/

zzyzzx says

https://www.cnbc.com/2024/06/25/the-typical-newly-built-house-in-the-us-is-shrinking.html

The typical new home in the U.S. is shrinking

Nooooooooo!

Absolutely true in my area.



It's really not "246 days", that's when Focus Homes listed the model which is at multiple lots. Same School District and unlike Commiefornia you can send you kid to one of a dozen charter schools, there's a Classical Academy in the area. You're guaranteed the next seat if they're overcapacity and high demand charter schools get more money to hire more staff to host more students. Florida also allows flexibility for taking your kid to a school more convenient to work or equidistant to co-parenting.

There's an available model that is $256k including the plot.

Focus homes is offering an intro rate of 5-6.5% with a 20% downpayment

Is homeloaner offering that? Or will the buyer have to get an 8% from the bank?

AmericanKulak says

Absolutely true in my area.



It's really not "246 days", that's when Focus Homes listed the model which is at multiple lots. Same School District and unlike Commiefornia you can send you kid to one of a dozen charter schools, there's a Classical Academy in the area. You're guaranteed the next seat if they're overcapacity and high demand charter schools get more money to hire more staff to host more students. Florida also allows flexibility for taking your kid to a school more convenient to work or equidistant to co-parenting.

There's an available model that is $256k including the plot.

Focus homes is offering an intro rate of 5-6.5% with a 20% downpayment

Is homeloaner offering that? Or will the buyer have to get an 8% from the bank?

New is a no-brainer in this case.

https://www.cnbc.com/2024/07/02/manhattan-is-buyers-market-as-real-estate-prices-fall-inventory-rises-.html

Manhattan is now a ‘buyer’s market’ as real estate prices fall and inventory rises

The price declines are a result of rising inventory of apartments for sale, which are also taking longer to sell. There are now more than 8,000 apartments for sale in Manhattan, which is higher than the 10-year average of about 7,000, according to Jonathan Miller, CEO of Miller Samuel, the appraisal and research firm.

Manhattan now has a 9.8 month supply of apartments for sale, which means it would take 9.8 months to sell all of the apartments on the market without any new listings, according to Brown Harris Stevens. “Any number over 6 months tells us there is too much supply and we are in a buyer’s market,” according to the Brown Harris Stevens report.

zzyzzx says

Manhattan is now a ‘buyer’s market’ as real estate prices fall and inventory rises

Noooooooo!

https://www.cnn.com/2024/07/01/business/adjustable-rate-mortgages-higher-payments/index.html

Thousands of homeowners are about to get slammed with higher monthly payments

Last year, when Jennifer Hernandez received notice that the mortgage payments on her Houston home would jump about $2,000 per month, she was stunned.

Hernandez refinanced her home loan in 2016 using an adjustable-rate mortgage loan, which has a low introductory rate for a fixed initial period.

Hernandez, who is herself a loan officer, had misremembered the terms of her $1.1 million loan: rather than a 10/1 ARM, which has a fixed rate for the first ten years and resets every year after that, Hernandez had taken out a 7/1 loan.

“I just got caught blindsided,” she said. “Life gets in the way, and you get busy. I’ve been slammed with kids and work for the last seven years.”

Last October, Hernandez’s mortgage rate jumped by 2% to 5.125%, the maximum allowed in the first adjustment year, according to her loan terms.

Most ARM loans come with an interest rate cap to prevent costs from spiraling out of control. Hernandez said her ARM is capped at 8.125%, five percentage points above her initial fixed rate.

Interest rates can be unpredictable. Hernandez said she saved money in the initial seven years of her loan, but if she could have a do-over, she likely would not have chosen an adjustable-rate mortgage in 2016.

As much as we love our current place, decided to move as we'd rather spend the money on trips. Will go down to the same rent we payed when we moved back to California over four years ago. But instead of a 2 bedroom apartment, will be living in a 3/2 1500 sqft house. For everyone who says rents have to go up, and you can't save money renting, read that last part again.