Act now: Changes will cost investors
Here's an investor heads-up from longtime syndicated newspaper columnist Ken Harney that ran over at Realty Times.
If you're planning to buy investment property and financing it through a lender who sells to Fannie Mae, keep the date Dec. 1 in mind. Nail down your mortgage commitments quickly -- in the next six weeks if you can.
That's because Fannie -- who's traditionally been a key source of funding -- plans to load on extra fees across the board for investor loans purchased after Dec. 1 because of market conditions. Freddie Mac is imposing similar fees, but its increases take effect Nov. 7.
There are also other rule changes. The article is worth a look if you are considering buying investment property anytime soon.
-- Lauren Beale
Thoughts? Comments?
Uhm, I think I would rather wait until prices collapse further.
Why buy now and pay the higher price/
Freddie and Fannie just went belly-up and at some point, they will go the way of Eastern Airlines. When that happens, housing prices will plummet.
Posted by: none | October 11, 2008 at 09:41 AM
This actually seems like a pretty welcome change in a sea of horrible ideas being implemented right and left by our panicked government, flying around throwing out money like crazed monkeys. Higher fees will mean less investors getting taxpayer subsidized loans to catch falling knives, which will mean less sales and less losses for taxpayers. Less sales will lead to lower prices and better affordability for everyone.
How did this change slip by the idiot patrol, I wonder?
Posted by: Nick | October 11, 2008 at 01:45 PM
Fannie and Freddie were designed to help get more affordable housing. by definition, they should not buy/get loans for investors!!!!
Letting investors buy houses is increasing the number of available buyers but not necessary home buyers.
I don't understand why the GSE are even in that business. The minimum the government can do now, is to impose a 5% additional fee on top of the mortgage rate. Such that if you want GSE to bu\y the loan, the interest will be 10% for 30 year fixed. Investors should use private money loans and not government sponsored loans.
Posted by: Laker | October 11, 2008 at 02:44 PM
Of course, the money you will save by waiting is exponentially more than whatever small fees they're adding.
Posted by: Rational Renter | October 11, 2008 at 02:49 PM
So, investors are basically also known as landlords. Since this change will make it more difficult to sell rental properties, either apartments or single family homes that are rentals, that will probably increase the foreclosure rate for those properties. The people evicted will be tenants, who will have less places to go as more rental properties are foreclosed on with no ready buyers (since buyers will find it hard to find affordable financing and many don't have large downpayments handy). If things don't change soon, doesn't it seem like America could develop a serious problem with homelessness, and beyond just the usual types of people who wind up homeless? Even employed people might have a hard time finding a place to live.
Posted by: Mary C. | October 11, 2008 at 04:06 PM
the investors have all commited suicide
wait for another 10 years and they will rise from their graves
btw did you hear about Iceland trying to steal close to 30 billion from England ?????
I would not surprised if Iceland gets invaded in a few months
this is no joke
lol
Posted by: samuel | October 11, 2008 at 04:45 PM
Does this mean that Fannie and Freddie are going to be biased in favor of real-live-homeowner-occupants and not the faceless and greedy speculators? Finally a break for those who intend to purchase and actually live in a house therefore become part of the community? Flippers beware!
Posted by: fezco | October 11, 2008 at 07:40 PM
We know investors were key to driving prices to where they peaked. Now I'm thinking -- wondering -- what oh what could this do to overall housing demand? Hmmm... this is really tough... give me a minute....
Posted by: It All Happens on the Margin | October 11, 2008 at 08:48 PM
That's because Fannie -- who's traditionally been a key source of funding -- plans to load on extra fees across the board for investor loans purchased after Dec. 1 because of market conditions. Freddie Mac is imposing similar fees, but its increases take effect Nov. 7.
Posted by: Rob | October 12, 2008 at 04:25 AM
Good article...thanks for pointing this out.
Posted by: Kevin Schmidtchen | October 12, 2008 at 01:41 PM
I'll take another 10% drop in the sales price, pay the extra fees, and come out better than someone who buys now and saves a few points in fees. That's propaganda nonsense.
Posted by: Wooster | October 13, 2008 at 08:40 AM
Mary, there are actually many employed people who cannot afford a place to live. I have two brothers, gainfully employed at non-minimum-wage jobs (one state-employed, one at a very large insurance co. you have absolutely heard of), who are barely able to make rent every month. I fully expect one of them and his family to end up moving into my house sometime within the next year.
Posted by: tarbubble | October 13, 2008 at 09:27 AM
Sounds just like the mortgage brokers on the RE blogs back in 2007.
"HURRY UP! HURRY UP! ONLY ONE MORE WEEK TO GET THOSE NEG-AM LIARS LOANS SUBMITTED!"
It's a suckers bet for investors.
Posted by: E | October 13, 2008 at 11:51 AM