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发帖数: 2300 | 1 估计美国的房子梦对不少的人会消失了。
How might home buying change if the federal government shuts down the
housing finance giants Fannie Mae and Freddie Mac?
The 30-year fixed-rate mortgage loan, the steady favorite of American
borrowers since the 1950s, could become a luxury product, housing experts on
both sides of the political aisle say.
Interest rates would rise for most borrowers, but urban and rural residents
could see sharper increases than the coveted customers in the suburbs.
Lenders could charge fees for popular features now taken for granted, like
the ability to "lock in" an interest rate weeks or months before taking out
a loan.
Life without Fannie and Freddie is the rare goal shared by the Obama
administration and House Republicans, although it will not happen soon.
Congress must agree on a plan, which could take years, and then the market
must be weaned slowly from dependence on the companies and the financial
backing they provide.
The reasons by now are well understood. Fannie and Freddie, created to
increase the availability of mortgage loans, misused the government's
support to enrich shareholders and executives by backing millions of shoddy
loans. Taxpayers so far have spent more than $135 billion on the cleanup.
The much more divisive question is whether the government should preserve
the benefits that the companies provide to middle-class borrowers, including
lower interest rates, lenient terms and the ability to get a mortgage even
when banks are not making other kinds of loans.
Douglas J. Elliott, a financial policy fellow at the Brookings Institution,
said Congress was being forced for the first time in decades to grapple with
the cost of subsidizing middle-class mortgages. The collapse of Fannie and
Freddie took with it the pretense that the government could do so at no risk
to taxpayers, he said.
"The politicians would like something that provides a deep and wide subsidy
for housing that doesn't show up on the budget as costing anything. That's
what we had" with Fannie and Freddie, Mr. Elliott said. "But going forward
there is going to be more honest accounting."
Some Republicans and Democrats say the price is too high. They want the
government to pull back, letting the market dictate price, terms and
availability.
"A purely private mortgage finance market is a very serious and very
achievable goal," Representative Scott Garrett, the New Jersey Republican
who oversees the subcommittee that oversees Fannie and Freddie, said at a
hearing this week. "No one serious in this debate believes our housing
market will return to the 1930s."
Still, powerful interests in both parties want the government instead to
construct a system that would preserve many of the same benefits, with
changes intended to minimize the risk of future bailouts. They say the
recent crisis showed that the market could not stand on its own.
"The kind of backstop that we have now, if it didn't exist, we would have
had a much more severe recession and a much sharper fall in home values,"
said Michael D. Berman, chairman of the Mortgage Bankers Association, which
represents the lending industry.
Hanging in the balance are the basic features of a mortgage loan: the
interest rate and repayment period.
Fannie and Freddie allow people to borrow at lower rates because investors
are so eager to pump money into the two companies that they accept
relatively modest returns. The key to that success is the guarantee that
investors will be repaid even if borrowers default -- a promise ultimately
backed by taxpayers.
A long line of studies has found that the benefit to borrowers is relatively
modest, less than one percentage point. But that was before the flood.
Fannie, Freddie and other federal programs now support roughly 90 percent of
new mortgage loans because lenders cannot raise money for mortgages that do
not carry government guarantees.
One prominent investor, William H. Gross, the co-head of Pimco, the major
bond investment firm, has estimated that he would demand a premium of three
percentage points to buy such loans -- a cost that would be passed on to the
borrower.
Proponents of a private market want the government gradually to withdraw its
support, allowing investors to regain confidence. They argue that interest
rates would eventually settle into roughly the same patterns that held
before the financial crisis.
Some supporters of government backing also like the idea, believing that it
will demonstrate the need for a backstop.
"I myself am eager to see whether there needs to be a guarantee," said
Representative Barney Frank of Massachusetts, a crucial Democratic voice on
housing issues.
Fannie and Freddie also make ownership more affordable by allowing borrowers
to repay loans with fixed-interest rates over an unusually long period. A
person who borrows $100,000 at 6 percent interest will pay $600 each month
for 30 years, compared to $716 each month for 20 years.
The 30-year loan first became broadly available by an act of Congress in
1954 and, from then until now, the vast majority of such loans have been
issued only with government support. Most investors are simply not willing
to make such a long-term bet. They prefer loans with adjustable rates.
Alex J. Pollock, a former chief executive of the Federal Home Loan Bank of
Chicago, said such loans would remain available in the absence of a federal
guarantee, but they might be harder to find. And lenders might demand a
larger down payment. Or a better credit score.
That would be a very good thing, said Mr. Pollock, now a fellow at the
American Enterprise Institute.
Longer terms make ownership affordable only by increasing the total cost of
the loan, because the borrower pays interest for a longer period. Moreover,
Mr. Pollock noted that over the last several years, borrowers with
adjustable-rate loans paid less as interest rates fell, while those with
fixed rates kept paying the same amount for devalued homes.
"One of the reasons that American housing finance is in such bad shape right
now is the 30-year mortgage," he said, noting that such loans are not
available in most countries. "For many people, it's not at all clear that
that's the best product."
Fannie and Freddie also allow a wide swath of the American public to borrow
money at the same interest rates and on the same terms. Borrowers who did
not meet their standards were forced to pay higher interest rates to
subprime lenders, but the companies essentially persuaded investors to treat
a vast number American families as if they were interchangeable.
They took messy bunches of loans, with risks as variable as snowflakes, and
created securities of uniform quality, easy to buy and sell. The result was
one of the most popular investment products ever created.
And in its absence, experts on housing finance say that fewer borrowers
would qualify for the best interest rates.
Susan M. Wachter, a real estate professor at the University of Pennsylvania,
said a new government guarantee was needed to preserve a homogenous market.
"There needs to be a systematic way of preventing" fragmentation, said
Professor Wachter. "That's what we need a bulwark against. Because if there
isn't, it will occur."
The government seems least likely to maintain a final set of benefits --
leniencies in loan terms that taxpayers effectively have subsidized for
borrowers.
Fannie and Freddie slashed the requirements for down payments in recent
years, saying that they were helping people with minimal savings become
homeowners. Two-thirds of the borrowers whose loans were guaranteed by the
companies from 1997 to 2005 made a down payment of less than 10 percent. But
borrowers who invest less default more often. The Obama administration has
said that it wants the companies to demand a minimum down payment of 10
percent.
A quirkier example is the ability to "lock in" an interest rate. Fannie and
Freddie permitted lenders to make such promises at no risk because the
companies had already obtained commitments from investors. In the companies'
absence, borrowers seeking rate locks may need to pay for them. |
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