With fewer people being able to afford homes, Freddie Mac seeks widespread expansion of 3% down mortgages.
ByLow down payment mortgages are creeping their way back into the market like a cat sneaking up on an unsuspecting mouse. The only difference here is that the mouse is a million dollar crap shack with a 30-year mortgage attached to it. People forget that Freddie Mac and Fannie Mae, the massive Government Sponsored Entities were nationalized U.S.S.R. style during the Great Recession. Now that times are good all caution is being thrown into the wind and we are setting up the stage for Irrational Exuberance Part II. The U.S. economy is built for boom and bust cycles. Massive credit expansion is occurring and while people are working, their dollars are not stretching as far as they would expect. In San Francisco, you are now considered “low income” if you make less than $117,000 a year. That makes sense when a standard home sells for $1.5 million. So now we have Freddie Mac attempting to push 3% down mortgages on a much larger scale since many people are priced out. What can possibly go wrong?…
