A bipartisan proposal seeks to wind down mortgage giants Fannie Mae and Freddie Mac and completely overhaul the nation’s mortgage system. According to Don Frommeyer, CRMS, President of NAMB (The Association of Mortgage Professionals), “A change in the mortgage system will be a welcomed change across the board as long as this function does not increase the cost to the consumer. In the past 5 years, the cost to the consumer has increased largely due to the changes that have been made in the mortgage market. We need to help the consumers going forward.”
Frommeyer continues to explain, “With the proposed changes, Fannie and Freddie would be replaced with a federally insured mortgage system. Investors will pay a fee to ensure insurance for mortgage securities they buy and potential homeowners will have the assurance that their mortgages are backed by strong capital.”
While the bill is still a ways off from being passed or implemented, Frommeyer says a change is needed. “We cannot risk another housing crisis or mortgage fiasco. For the housing market to be successful, potential homeowners need to feel protected and safe with their mortgage options. The bill proposed by Senators Tim Johnson and Mike Crapo takes a big step in the right direction, and definitely opens dialog to discuss what we need to do with these large GSE’s” continues Frommeyer.
For more information, visit www.namb.org.