Changes Coming to the Lending Industry?
Posted on January 16th, 2017
Changes to loans and higher interest rates may be in the works- With Fannie Mae and Freddie Mac backstopping many loans, interest rates are seen as artificially low compared to a "free-float" purely market-driven system. Going forward; there is a fork in the road- On one hand; if Fannie and Freddie are shut down and private lenders take on risk without a government backstop; as is the desire of some in Congress; we could easily see a sizable increase in mortgage rates and maybe even the end of the 30-year loan. On the other hand, there is a trend to loosen lending standards. If there are no other changes, this should result in more buyers and a further increase in prices. With the many moving parts to the industry; 2017 may turn out to be a pivotal year.
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