Carrying the tag of'' Federally Chartered corporation'',Fan's
can borrow at lower
interest rates for short term loan than commercial banks,and
lends the loan to long term mortgages.
http://www.fanniemae.com/ir/pdf/sec/2004/2004_form10K.pdf
However,half of the subsidy go into the pocket of Fan's
excutives and shareholders,
confirmed by White House chief economist N. Gregory Mankiw in
2003.
http://online.wsj.com/article/SB106851042414562400.html?mod=Extra
his speech in 2003
http://www.economics.harvard.edu/faculty/mankiw/files/stbank.pdf
http://gregmankiw.blogspot.com/
u can read from
http://online.wsj.com/article/SB121599777668249845.html?mod=Commentary-US
that Fan's have a lot of problems but no President cared to
rectify it.
Why US gavaman
so stupid to gurantee trillion of mortgages
I asume US will honor the gurantees by Fan's.
Fan's sells mortgages and gurantee them in principal and
interest.
This is a very long term and huges amount committments.Why?
I think in the past few decades,US ruling
party just dare not
change this system.Any change to this stupid sys may risk
their
chance in election.
Low down
payment give buyers' incentives to walk away
I am for higher house ownership,buy not at all cost.
Fan's allow low down payments as low as zero to 3 %
of purchase price.
Any drop in price make the buyer return the key by post.
They just treat the instalement as rental.
If buyer
cannot save the down ,how can they pay long term
mortgage
If a family,from single to few people in a family,cannot
save
down payment of say 20% of the price,do u think in long
term,
the buyer has the discipline,ability and incentive to repay
the mortgage?
To Help these undiscipline people to buy house is as good as
asking
them borrow money from loan sharks or give them 10 credit
cards.
Unfortunately,in the past few decades in USA,there are too many
kind
heart people to fullfill Amercian dream,if not to push for
high
economic growth.
From US President to sub prime broker,who get $800 to help
buyer to get low-down or no--down loan,and buyers and
sellers,
lawyers,contractors,developers etc are happy with this
system.
Why not?
References
How much should I put down
for a new home?
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If you enter a down payment that is
less than 20% of the home
purchase price, the calculator estimates a monthly amount for
private mortgage insurance
(PMI). Mortgage lenders generally require that
you obtain mortgage insurance if your down payment is less than 20%
of the home purchase price.
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How can I reduce mortgage
insurance costs?
....................................................5.00%
Down
10.00% Down
15.00% Down
20.00% Down
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Down payment amount
$9,250
$18,500
$27,750
$37,000
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Mortgage insurance
$114
$72
$42
$0
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Total monthly payment
$1,408
$1,308
$1,219
$1,119
5 % down only!!Just pay the mortgage insurance.OK .no
problem.
