You kind of have it right. Freddie Mac will be the direct purchaser of a borrower’s second mortgage. So a bank/mortgage broker (authorized seller) will underwrite someone for a second mortgage up to an 80% LTV, fixed rate based on current mortgage rates, and paid and amortized over 20 years. As far as I can tell Freddie Mac will not be repackaging and selling these to anyone. They will be the note holders. Normal HELOCs are held by banks at floating rates and usually are interest only and up to 85% LTV.
Implications and analysis are far too long for a Nostr note, but long and short is that the federal government wants to inject liquidity through banks and mortgage brokers, and are guaranteeing the purchase of the underlying paper to do so. The bank/broker takes on no default or loss risk and gets to rip some nice fees for underwriting and processing the loan.
plebiANON
npub13q8…6vpv
2024-05-31 03:44:55
in reply to nevent1q…x9tl
Author Public Key
npub13q8evu294dnt20vacfuagj5hy2agwhfr93el8h68qlg708zrxm8qnd6vpvSeen on
wss://relay.noswhere.comPublished at
2024-05-31 03:44:55Event JSON
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"content": "You kind of have it right. Freddie Mac will be the direct purchaser of a borrower’s second mortgage. So a bank/mortgage broker (authorized seller) will underwrite someone for a second mortgage up to an 80% LTV, fixed rate based on current mortgage rates, and paid and amortized over 20 years. As far as I can tell Freddie Mac will not be repackaging and selling these to anyone. They will be the note holders. Normal HELOCs are held by banks at floating rates and usually are interest only and up to 85% LTV. \n\nImplications and analysis are far too long for a Nostr note, but long and short is that the federal government wants to inject liquidity through banks and mortgage brokers, and are guaranteeing the purchase of the underlying paper to do so. The bank/broker takes on no default or loss risk and gets to rip some nice fees for underwriting and processing the loan.",
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