Okay, I have researched these "adverse delivery fees" -reviewing a number of websites that provide information on the matter. In a nut shell this is what I have discovered:
Fannie and Freddie, which are government-sponsored enterprises, or GSEs, collect guarantee fees on bundles of loans that they securitize. In exchange, the GSEs make sure that the investors are paid, even if the borrowers miss payments. Thus, guarantee fees act like insurance. Guarantee fees are going up in reaction to this year's turmoil in the mortgage business, just as auto premiums increase after a claim.
Everyone getting a mortgage securitized by Fannie and Freddie -- and that's probably a majority of home loans nowadays -- will pay a fee of a quarter point, or $250 for each $100,000 borrowed. Fannie calls it an "adverse market delivery charge" and Freddie calls it a "market condition delivery fee" that it is imposing "due to continued deterioration in the mortgage market."
Mortgage professionals don't believe the fees are solely about risk. They suspect it's also about market power. Before this year's mortgage meltdown, Fannie and Freddie had a lot of competition in the business of securitizing mortgages. Much of that competition has evaporated, leaving Fannie and Freddie free to add fees, and there's little that lenders and brokers can do about it.
Main Street Solution:
1)Discover who approved these fees.
2)How is it that a government sponsored enterprise, that is an enterprise that is sponsored by we the taxpayers, believes it right/fair to charge these fees?
3) Discover to whom one can write in order to voice an objection to these fees.
We must stand together on Main Street!
Tuesday, March 17, 2009
Thursday, March 12, 2009
How Much More Can We Take
I am a teacher who works for the Calif. Dept Of Corrections and Rehabilitation. For a good long while I have been searching for a home to buy in the Ventura County area. Needless to say the cost of housing in this area has been obscenely high, making buying a house for many people out out of the question.
Lower interest rates coupled with home prices falling dramatically (sorry to those who have either lost their homes or their property value has plummeted) purchasing a home in the area is somewhat more affordable.
This past weekend, I found a house on which I planned to place on offer. I consulted with my mortgage gal, who ran a good faith estimate to give me an idea as to what I could expect in closing costs. Below is some of the verbiage from the e-mail conversation that I had with her. (FYI, as a teacher in California, I am able to take advantage of a loan called CalSTRS),
. . . "Unfortunately, on Calstrs there is investor hits, such as the 80/17 program is a flex program with sub financing so there is a .50 of the loan amount charge for that. There is also a ..25 charge of the loan amount which is on all FNMA loans for declining market called an adverse delivery fee. . ."
Investor hits, flex program, sub-financing, and adverse delivery fee gave cause for wonderment.
I asked my mortgage gal to explain the terms
What are investor hits?
On all loan products there are investors who purchase the loans, they impose their cost to buy the loan, so the investor that buys CalSTRShas certain costs that are associated with that loan product Is a flex program a loan whereby one pays 80% of the amount financed now and 17% after five years
What is sub financing?
financing is a loan that has a 2nd involved
What is an FNMA loan?
FNMA is Fannie Mae
Who sets the adverse delivery fee?
Fannie Mae
Does the mortgage company receive the $$ for point hits or are these charges pocketed by others? How are the hits determined?
The hits are determined by the investors, the company nor I receive money on that.
After learning this, I about flipped and responded to my mortgage gal:
"Sooooooooooooooo based on your info, currently our tax dollars are bailing out investors/banks/for their risky investments and greed -then these investors/banks and Fannie Mae (Govt. insured) have the audacity to attach fees to the loans for hardworking people, who in these depressing economic times are lucky enough to still have a job ! Shame on them! An adverse delivery fee, investor hits! Pleeeaaassse! How much more is a person/taxpayer suppose to take!
Don't "they" get it it? Wall Street can only be sustained if we on Main Street can keep our own economic ball rolling! For most of us, our personal economic ball has rolled right into the gutter--gutter-ball!! Have "they" not learned their lesson on this yet? Our economy will only work by supporting and assisting folks from the bottom up---from Main Street to Wall street--not the other way around!!!!!!!!!!!!
A Main Street Solution:
To: State and Federal Tax Offices
From: Main Street
You no longer have my permission to deduct taxes from my paycheck. Now that I will be receiving my gross salary, I will be able to create my own stimulus plan; earmarking and spending my hard earned money for the causes that I believe are worthy and to folks who I believe will be good stewards of the money that I used to fork over in taxes. Please be advised that such causes don't include Adverse Delivery fees to government insured Fannie Mae or fees to investors/banks who plan to buy my mortgage loan for their own economic gain. You have all been given enough money! If you can't figure out how to spend hundred of billions of dollars wisely, then it should not be entrusted to you.
P.S. Please be advised, most taxpayers are mad as hell and we are not taking it anymore.
Lower interest rates coupled with home prices falling dramatically (sorry to those who have either lost their homes or their property value has plummeted) purchasing a home in the area is somewhat more affordable.
This past weekend, I found a house on which I planned to place on offer. I consulted with my mortgage gal, who ran a good faith estimate to give me an idea as to what I could expect in closing costs. Below is some of the verbiage from the e-mail conversation that I had with her. (FYI, as a teacher in California, I am able to take advantage of a loan called CalSTRS),
. . . "Unfortunately, on Calstrs there is investor hits, such as the 80/17 program is a flex program with sub financing so there is a .50 of the loan amount charge for that. There is also a ..25 charge of the loan amount which is on all FNMA loans for declining market called an adverse delivery fee. . ."
Investor hits, flex program, sub-financing, and adverse delivery fee gave cause for wonderment.
I asked my mortgage gal to explain the terms
What are investor hits?
On all loan products there are investors who purchase the loans, they impose their cost to buy the loan, so the investor that buys CalSTRShas certain costs that are associated with that loan product Is a flex program a loan whereby one pays 80% of the amount financed now and 17% after five years
What is sub financing?
financing is a loan that has a 2nd involved
What is an FNMA loan?
FNMA is Fannie Mae
Who sets the adverse delivery fee?
Fannie Mae
Does the mortgage company receive the $$ for point hits or are these charges pocketed by others? How are the hits determined?
The hits are determined by the investors, the company nor I receive money on that.
After learning this, I about flipped and responded to my mortgage gal:
"Sooooooooooooooo based on your info, currently our tax dollars are bailing out investors/banks/for their risky investments and greed -then these investors/banks and Fannie Mae (Govt. insured) have the audacity to attach fees to the loans for hardworking people, who in these depressing economic times are lucky enough to still have a job ! Shame on them! An adverse delivery fee, investor hits! Pleeeaaassse! How much more is a person/taxpayer suppose to take!
Don't "they" get it it? Wall Street can only be sustained if we on Main Street can keep our own economic ball rolling! For most of us, our personal economic ball has rolled right into the gutter--gutter-ball!! Have "they" not learned their lesson on this yet? Our economy will only work by supporting and assisting folks from the bottom up---from Main Street to Wall street--not the other way around!!!!!!!!!!!!
A Main Street Solution:
To: State and Federal Tax Offices
From: Main Street
You no longer have my permission to deduct taxes from my paycheck. Now that I will be receiving my gross salary, I will be able to create my own stimulus plan; earmarking and spending my hard earned money for the causes that I believe are worthy and to folks who I believe will be good stewards of the money that I used to fork over in taxes. Please be advised that such causes don't include Adverse Delivery fees to government insured Fannie Mae or fees to investors/banks who plan to buy my mortgage loan for their own economic gain. You have all been given enough money! If you can't figure out how to spend hundred of billions of dollars wisely, then it should not be entrusted to you.
P.S. Please be advised, most taxpayers are mad as hell and we are not taking it anymore.
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