Goodbye Yellow Brick Road…Goodbye 30-Year Mortgages?
The American Dream as we know it is being redefined for Florida real estate and the nation. Elton John’s famous song Goodbye Yellow Brick Road reminds us that homeownership will no longer define the American Dream and the Yellow Brick Road really leads to no where (just like in Oz).
So the tune Goodbye Yellow Brick Road is sounding the same as Goodbye American Dream as we say see you later to 30-Year Mortgages. The fact is, without housing finance giants Fannie Mae and Freddie Mac, the 30-year mortgage might fade away, leaving many potential homeowners with little to no financing options.
The 30-year fixed-rate mortgage loan has been a steady favorite of American borrowers since the 1950s and is now on its way to become a luxury product.
What would real estate be like without Fannie Mae and Freddie Mac?
According to The New York Times, life without Fannie and Freddie is the rare goal shared by the Obama administration and House Republicans after the two giants misused the government’s support to enrich shareholders and executives by backing millions of shoddy loans.
Taxpayers have spent more than $135 billion righting those wrongs.
However grave the transgressions, there would be consequences for Americans if Fannie and Freddie are shut down. Interest rates would rise for most borrowers, and lenders could start charging fees for locking in those rates weeks or months before taking out a loan.
Still, other politicians favor a purely private mortgage finance market.