Marc's Mortgage Matter's

Interesting take on the fannie and Freddie for those interested in understanding in simple terms what is developing.

FannieFreddie101WD.doc

Can the Fed ban prepayment penalties? This story appeared over the weekend: “The Federal Reserve, in a bid to end abusive lending practices, will ban penalties on some high-cost mortgages that make it harder for people to refinance, a person familiar with the decision said. The prohibition on prepayment penalties, part of a broader Fed response to the collapse of the subprime mortgage market, targets high-cost loans with interest rates that reset in the first four years, the person said. Rules also would limit charges when borrowers seek to pay off mortgages in the first two years on other types of high-priced loans, the person said. The Federal Reserve Board of Governors will vote July 14 on a series of rules to strengthen protections for borrowers taking out subprime home loans. Lenders use prepayment penalties to discourage borrowers from refinancing their loans and can trap borrowers in loans they can't afford, consumer advocates said.” 

Last week we had a top notch borrower that had 20% to put down buying a coop superb credit and super income... only hitch was he's in finance/Wall Street and subject to bonuses...whopping bonuses. Coop board turned them down! They believed he won't get much for 2009. Nuff said ;/