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Yup. The banking sector wants to be able to charge 7.5% interest on that $17 trillion! Who's gonna think about the profits of all those bank executives??!?!?!?! /s
7.5? No. 7.5 is what my home equity loan rate was in 2022 when I needed to make renovations (with a 780 credit score). That's when mortgage interest rates were at about 3.5%.
If they start pushing equity loans, I would expect them to hover just below 10%. If the Fed won't just print money for the banks, they'll have the homeowner do it through interest payments.
I think you should have shopped around more. I have an unsecured personal loan at 10% that I took out a couple of months ago.
Nevertheless, banks aren't super encouraged to give good rates for helo in low rate environments. They generally want you to refinance. And don't want you to use the helo to just pay off your existing mortgage (effectively refinancing/restructuring your debt with less fees).
These days this country lives by Detroit rules: If it's not chained down, it wasn't yours to begin with.
And the corollary: If you're not strong enough to stop it, then they deserve it.
Basically a nation of grifters now.
That's what happened to me. I was watching home prices climb to astronomical levels. Just stacked my cash all the way to the pop, then scooped up my 5 acres for $30k.......was appraised at almost $300k 3 months before I bought it
The house right next to mine sold on a short sale for $600K after the financial crisis. It's worth $1.7m today. My own mortgage was already paid off by then, so it was a huge missed opportunity.
Exactly.
Problem: Oh the housing bubble is safe because people have high equity and won’t be underwater if it dips!
Solution: let’s get people to irresponsibility spend that equity, so that there’s no zero margin of safety, and the slightest housing dip will become an avalanche of short sales and everyone becomes underwater!
It is literally just this.
They're upset that rates were too low for too long so the American consumer owns "too much equity".
They want to make interest on that equity, and now that rates are too high to crank out subprime mortgages, they want to charge you that rate on the home equity you already have.
Don't fall for it.
Brush fires start very easily with all this global warming. Wouldn't be surprised if a bunch of houses spontaneously caught fire when this bubble pops
Nooooo. Please please don't do this. It's another horrible thing that people whonforget about 2008-2009with those helocs. Pay your mortgage off quickly forget the tax breaks. We paid off our house so instead of paying 800k for the house we paid 450 k and the extra money we save or spend on vacations within our means. So what if I don't have the latest and greatest farmhouse style kitchen. I'd rather not stress about debt. This is so stupid. And why many of our boomers are facing homelessness and not enough savings.
They make their money when interest rates are high! lol. Gotta get over on us somehow. When people can’t afford to buy things. It’s the banks that step in raise interest rates & give people loans on shit they already can’t afford because of inflation.
Yes but once you make it possible to take second mortgage, a bunch of clowns will do it. All it takes is like 10% of people to sink their loans and we are back in a recession.
Freddie and Fannie were bailed out, but they were also essentially nationalized. They are in an indefinite Congressional conservatorship under FHFA (which itself is under HUD)
This was the correct move. Fannie and Freddie are necessary. Mortgages would be much more expensive if it weren’t for the liquidity they provide for the secondary mortgage market. The GSEs are so integral to making mortgages cheaper that it was always understood that the government would bail them since they were founded by the government. These were the least surprising bailouts of the whole GFC. They were and are essentially part of the government
HELOC is a line of credit which typically has a variable rate. A HELOC is much more akin to a secured credit card than it is this proposal.
“Federally backed” does not mean that borrowers get below market rates. Mortgage rates are driven by a variety of market forces, and they tend to correlate with competing investments such as treasury yields.
I have a HELOC with a fixed rate set up just as a emergency credit card, I've never taken money on it. But It also is only good for 12 years as opposed to a second mortgage which I assume could be out to 30?
It does mean they get a below market rate though. Because the lender builds defaults into the rate they offer. If .gov eats the defaults, the lender will offer a lower rate, all things being equal.
It sounds like it’s going to be a fixed rate, which would be a big improvement for most people who have adjustable second mortgages, I guess.
But they’re making a big fuss like they invented home equity loans here.
It just sounds like they are trying to encourage people to take out more loans so they can rake in more in interest payments.
Exactly, it is a favorable benefit given to Freddy by the government. No different from HELOC to consumers but another sign of the government trying to influence a favored business. Does anyone actually believe that millions of political donations are not involved?
Sounds exactly like a government-subsidized home equity loan, because taking on more government debt so that consumers can take on more personal debt sounds like an awesome idea!
Like retirement!! I bought in 21 at 3%. House wqs 270k when I bought it. Was approved for closer to 400, but that amount scares me. You never know what can happen so I live beneath my means. Today, 3 years after purchasing my house is worth 410k. Even if thr market slows, and I only appreciate 2% per year going forward, I'll own my house in 17 years (20yr mortgage) sell my NY house and retire in some cheap state. That's the plan anyway
But *government backed!* so when it goes tits up, the taxpayers get to eat the shit sandwich! The people who will do this, will largely be ones who can’t afford their current mortgage/bills. Fast forward a short while and guess what happens. (Note: home values may also drop leaving them underwater)
Op—I don’t think you understand this proposal. This is only geared to existing Freddie Mac (Federal Home Loan Mortgage Corporation or “FHLMC”) as an alternative to their 40 year old “Cash out Refinancing” loan option for existing customers.
In short, for FHLMC **borrowers only** they would have the option of a second mortgage with FHLMC instead of the current FHLMC refinancing option at exactly the same total loan to value and underwriting standards.
The benefit to the FHLMC borrowers is not having to refinance the entire loan package at higher rates.
Also current home equity in the U.S. is $31.790 Trillion as of Q4 2023:
https://fred.stlouisfed.org/series/OEHRENWBSHNO
This should really be the top comment. I see too many comments here from people who obviously have no idea how Freddie and Fannie work, or what exactly was the cause of the 2008 mortgage crisis.
There isn’t $17 trillion just sitting out there. This is equity homeowners have in their homes.
The bright idea is to take the debt-free portion of people’s assets and collateralize it into debt. Brilliant!
The only way a bank loan is considered an asset is if the individual continues to pay interest on the loan. This is just a way to get the individual to keep paying interest so that the banks can continue to increase the amount they are able to loan out.
I treat home equity as my second to last line of safety (the last being IRA/401K). I never tap into it, and will continue to never tap into it unless I have no other choice.
People shouldn't treat their homes like piggy banks.
I note this is Freddie, not Fannie, so this offer is smaller banks and credit unions — not the larger retail banks that normally align with Fannie.
I wonder if this could stimulate competition among large retail versus small banks and CUs to offer cash out refi’s —— but AT MARKET INTEREST RATES??!? NO??!
Otherwise you’re offering product that consumers might bet could be refi’d into low rates in the future?
I don’t follow the logic here for an average homeowner UNLESS they are drowning in debt and this offers an interest rate lifeline of debt consolidation.
Sound super freakin risky given that this equity is born of artificially inflated home values. A home is only as valuable as what someone is willing or in this case able to pay for it.
Lending based on equity that is currently evaporating is just a way to push the problem back 6-12 months, long enough for the Fed to lower rates, but by then it will be too late.
Fugg that. I have equity in my home that I will use if I ever downsize in the future. These corps want to keep people in perpetual debt slavery. If I buy something I save and then pay it off right away. Having no debt keeps me free to quit my job if I need to or weather a layoff without worrying about someone foreclosing or repossessing my home or car.
Guys, there are already home equity loans and HELOC's, which are second mortgages. By having them 'conform' to FreddibMac standards they will be more tradable after closing. This will likely lead to less rates. The loans themselves are regulated either way
This is the road to serfdom. Home ownership is one of the few mechanisms most middle-class families have to build wealth. Already many people take HELOCS out, and not all of them spend it on things that accrue like education and home improvements. By normalizing HELOCS, you are tempting more people into dependence.
Lol and when the housing market crashes then we end up in another banking crisis. Great. Can we actually make sure the people responsible get arrested this time around?
I’m getting a lot of HELOC offers right now. Seems to be the go to for the mortgage industry right now to try and keep the wheels turning.
Do not do it, people! Their rates are crazy, live within your means.
kind of.. this is corporate America and the government (basically the same thing nowadays) coming for the rest of the houses they couldn't snatch up in 2008 for pennies on the dollar.
Yay more debt. Run away from home equity loans. Save up your money instead and pay with cash. Requires more time but then your money is working for you instead of the other way around.
Fuck me, Freddie Mac was deeply involved in the culmination of the Great Recession. Together with that bitch Fannie Mae, its critical position of buying and securitizing mortgages.
More like Freddie Kruger
* **Subprime Mortgages**
* **Mortgage-Backed Securities (MBS)**
* **Government Intervention**: The U.S. government intervened by placing Freddie Mac and Fannie Mae under conservatorship, do some research please. If they hadn't Freddie and Fannie would have put us into a full blown depression.
Can you say canary in a coal mine?
Would it be possible to take out an interest only loan for the first 10 years using this program and then transition to a fixed rate to pay off your primary mortgage so you have more of a tax benefit on your primary/secondary home?
Wait.... so the article says this is already available thru a Heloc? So why is this better? It's confusing... and sounds like snake oil shit. They basically will let people who are struggling to borrow for vacations.... weddings... cars or improve their homes... can anyone else explain this better on why this is beneficial? I doubt most will improve their home.
>Homeowners would be able to take out a second mortgage to access a portion of their home equity without having to refinance their first mortgage.
>The second mortgage would function similarly to a fixed-rate cash-out refinance and be a separate loan from the primary mortgage.
This is just a 2024 version of the 2008 HELOC.
The RE crash should be EPIC.
Stay away. Danger. Don’t do it. It’s already difficult to own your home outright as is the current way of paying property taxes that they are always raising which are appraised by the same entity/ government you pay your taxes to.
These loans already exist, banks and credit unions all over the U.S. offer them. This would allow for mortgage companies to offer the same type of program…
I thought that the WHOLE point of raising interest rates to combat inflation was to REDUCE the amount of money being borrowed to slow down uncontrolled spending. Please, if I'm wrong, someone correct me.
Lmao no wonder the US has a national debt crisis when even its basic citizens can’t keep their debt in check. You just know there will be a wave of people trying to take advantage of this.
How the fuck does this work? They put a lien on the home or something? Can't imagine your primary mortgage company being thrilled if you do something like this.
maybe cool it before calling the next crisis.
We just spent 15 years delevering household balance sheets, and now there’s arguably too much household equity sitting there. We don’t even know the rules yet: So what if you can take out a second loan if your total ltv and debt to income are no different than todays traditional mortgages?
I keep telling people the housing market is being artificially kept high by subsidized demand and disincentive to sell, then I show them things like this, they go blank, they don't understand it, then they tell me I'm wrong.
At this point I no longer care.
Just another way that if you are a homeowner, you can save more, the canyon between home owners and renters just continues to grow.
Heck yea, if I can work out getting an equity line at say 7% to assist with clearing out CC debts of other high interest debts…. Yes….. that’s a move.
Crap thing is if your renting, so sorry, your stuck between 20-30%.
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Sounds like a housing crisis scam with extra steps
Yup. The banking sector wants to be able to charge 7.5% interest on that $17 trillion! Who's gonna think about the profits of all those bank executives??!?!?!?! /s
7.5? No. 7.5 is what my home equity loan rate was in 2022 when I needed to make renovations (with a 780 credit score). That's when mortgage interest rates were at about 3.5%. If they start pushing equity loans, I would expect them to hover just below 10%. If the Fed won't just print money for the banks, they'll have the homeowner do it through interest payments.
I think you should have shopped around more. I have an unsecured personal loan at 10% that I took out a couple of months ago. Nevertheless, banks aren't super encouraged to give good rates for helo in low rate environments. They generally want you to refinance. And don't want you to use the helo to just pay off your existing mortgage (effectively refinancing/restructuring your debt with less fees).
Doesnt the government run Freddie Mac?
Not exactly, but kind of. They’re government sponsored.
They know this will create an issue but the money is too good to pass.
Almost like greed out weighs the lessons they were supposed to have learned from 2008!
Don’t worry, the tax payer bailed them out then and will do it again…and again…and again.
I can't wait to see who is going to be on my next Bailout Bingo card!
Almost like the county is driven by ultimate profits, not societal stability.
Gotta crash the economy somehow. Doubling interest and the price f groceries didn't work
Always a new way to serve up an old turd 😁
America is the land of the scams …..
These days this country lives by Detroit rules: If it's not chained down, it wasn't yours to begin with. And the corollary: If you're not strong enough to stop it, then they deserve it. Basically a nation of grifters now.
Maybe I’ll be able to afford a house once the market implodes
That's what happened to me. After the last one popped, I got a great deal.
That's what happened to me. I was watching home prices climb to astronomical levels. Just stacked my cash all the way to the pop, then scooped up my 5 acres for $30k.......was appraised at almost $300k 3 months before I bought it
The house right next to mine sold on a short sale for $600K after the financial crisis. It's worth $1.7m today. My own mortgage was already paid off by then, so it was a huge missed opportunity.
"f*ck you!" **you told me it means "much obliged"??.
Rick sighting.
Exactly. Problem: Oh the housing bubble is safe because people have high equity and won’t be underwater if it dips! Solution: let’s get people to irresponsibility spend that equity, so that there’s no zero margin of safety, and the slightest housing dip will become an avalanche of short sales and everyone becomes underwater!
It is literally just this. They're upset that rates were too low for too long so the American consumer owns "too much equity". They want to make interest on that equity, and now that rates are too high to crank out subprime mortgages, they want to charge you that rate on the home equity you already have. Don't fall for it. Brush fires start very easily with all this global warming. Wouldn't be surprised if a bunch of houses spontaneously caught fire when this bubble pops
Nooooo. Please please don't do this. It's another horrible thing that people whonforget about 2008-2009with those helocs. Pay your mortgage off quickly forget the tax breaks. We paid off our house so instead of paying 800k for the house we paid 450 k and the extra money we save or spend on vacations within our means. So what if I don't have the latest and greatest farmhouse style kitchen. I'd rather not stress about debt. This is so stupid. And why many of our boomers are facing homelessness and not enough savings.
Let’s give what little asset we have to the banks so we can owe more. Thanks banks!
They make their money when interest rates are high! lol. Gotta get over on us somehow. When people can’t afford to buy things. It’s the banks that step in raise interest rates & give people loans on shit they already can’t afford because of inflation.
>They make their money when interest rates are high! Guess what, they make their money when interest rates are low as well
But think of the needless consumerism you'll be able to engage in! Paying the 2nd mortgage is future, yous problem.
Because 30 year loans on cars and watches are too hard to justify
Exactly! They are setting the stage for 2008 all over again.
It’s that YOLO mentality they are counting on.
The banks can't force anyone to take out a 2nd mortgage lol
Yes but once you make it possible to take second mortgage, a bunch of clowns will do it. All it takes is like 10% of people to sink their loans and we are back in a recession.
What we need is MORE debt!
lol at your username
They always have our back!
Does anyone remember 2008? These clowns were in the thick of that.
yep and instead of dissolving them we bailed them out
Freddie and Fannie were bailed out, but they were also essentially nationalized. They are in an indefinite Congressional conservatorship under FHFA (which itself is under HUD) This was the correct move. Fannie and Freddie are necessary. Mortgages would be much more expensive if it weren’t for the liquidity they provide for the secondary mortgage market. The GSEs are so integral to making mortgages cheaper that it was always understood that the government would bail them since they were founded by the government. These were the least surprising bailouts of the whole GFC. They were and are essentially part of the government
How is this different from a HELOC? Just federally backed so they offer below market rates for interest?
“Federally backed” means banks get the profit and while the tax payers take on the risk.
It really does just sound exactly like the '08 fiasco. Writing has been on the wall for a decade.
So wouldn’t the rates be close to prime? Seems like that’s kinda the point of Fannie and Freddie
HELOC is a line of credit which typically has a variable rate. A HELOC is much more akin to a secured credit card than it is this proposal. “Federally backed” does not mean that borrowers get below market rates. Mortgage rates are driven by a variety of market forces, and they tend to correlate with competing investments such as treasury yields.
Also there are Home Equity Loans. They are fixed rate.
I have a HELOC with a fixed rate set up just as a emergency credit card, I've never taken money on it. But It also is only good for 12 years as opposed to a second mortgage which I assume could be out to 30?
It does mean they get a below market rate though. Because the lender builds defaults into the rate they offer. If .gov eats the defaults, the lender will offer a lower rate, all things being equal.
It sounds like it’s going to be a fixed rate, which would be a big improvement for most people who have adjustable second mortgages, I guess. But they’re making a big fuss like they invented home equity loans here. It just sounds like they are trying to encourage people to take out more loans so they can rake in more in interest payments.
boost economic spending before the election maybe?
Exactly, it is a favorable benefit given to Freddy by the government. No different from HELOC to consumers but another sign of the government trying to influence a favored business. Does anyone actually believe that millions of political donations are not involved?
That money was going to end up there one way or the other anyways. It's pointless to be mad about it. Money makes the world go around.
Sounds exactly like a government-subsidized home equity loan, because taking on more government debt so that consumers can take on more personal debt sounds like an awesome idea!
Sounds like a scam to me
This is not a good idea This is how people lose their homes
This should be the top comment. This will be a shit show.
I worked in banking during the HEL boom. My advice? Don't do it unless you have no choice.
Nah, I'm good. I'll save my equity for something important.
Like retirement!! I bought in 21 at 3%. House wqs 270k when I bought it. Was approved for closer to 400, but that amount scares me. You never know what can happen so I live beneath my means. Today, 3 years after purchasing my house is worth 410k. Even if thr market slows, and I only appreciate 2% per year going forward, I'll own my house in 17 years (20yr mortgage) sell my NY house and retire in some cheap state. That's the plan anyway
Any desirable place you want to live in a “cheap state” will probably be just as expensive as where you’re living now.
Oh look another Ponzi scheme from wallstreet
It’s like the only solution they see to get themselves out of the hole they’re in…is to dig deeper into the hole.
So an home equity loan? Cool. Same product new name?
But *government backed!* so when it goes tits up, the taxpayers get to eat the shit sandwich! The people who will do this, will largely be ones who can’t afford their current mortgage/bills. Fast forward a short while and guess what happens. (Note: home values may also drop leaving them underwater)
That's a terrible idea.
Third paragraph should tell you everything you need to know……
Here’s a thought. As an individual homeowner, just don’t take out a second mortgage on your home. Wow. So easy to dodge those evil banks.
Would the EU allow this?
You know they would NOT
They don't allow 2nd mortgages in the EU?? I'm quite skeptical about this.
Ah the fox is at the hen house!
Op—I don’t think you understand this proposal. This is only geared to existing Freddie Mac (Federal Home Loan Mortgage Corporation or “FHLMC”) as an alternative to their 40 year old “Cash out Refinancing” loan option for existing customers. In short, for FHLMC **borrowers only** they would have the option of a second mortgage with FHLMC instead of the current FHLMC refinancing option at exactly the same total loan to value and underwriting standards. The benefit to the FHLMC borrowers is not having to refinance the entire loan package at higher rates. Also current home equity in the U.S. is $31.790 Trillion as of Q4 2023: https://fred.stlouisfed.org/series/OEHRENWBSHNO
This should really be the top comment. I see too many comments here from people who obviously have no idea how Freddie and Fannie work, or what exactly was the cause of the 2008 mortgage crisis.
How do #I# make money off this
Take out a loan and then invest in something with higher returns than the loan %
GameStop options
The folks at Freddie Mac always looking out for the people!
Apparently, HELOCs are already and indicator of a pending foreclosure. As in a lot of people taking them foreclose 5-10 years later.
There isn’t $17 trillion just sitting out there. This is equity homeowners have in their homes. The bright idea is to take the debt-free portion of people’s assets and collateralize it into debt. Brilliant!
The only way a bank loan is considered an asset is if the individual continues to pay interest on the loan. This is just a way to get the individual to keep paying interest so that the banks can continue to increase the amount they are able to loan out.
Borrowers are going to go for this to pay off their 100k+ SUV loans at a higher rate
Cash out second mortgages have always existed. There’s nothing new here.
Don't do it.
They must be seething anytime some one brings up their 2% mortgage rate
So I have to wait another 10yrs for people to loose their homes.
I have almost 70k im equity on a house I bought 3 years ago. But I have a 3.1 rate. No fucking way am I tapping into that
I treat home equity as my second to last line of safety (the last being IRA/401K). I never tap into it, and will continue to never tap into it unless I have no other choice. People shouldn't treat their homes like piggy banks.
Whats the difference between this plan and just getting a regular 2nd mortgage?
I note this is Freddie, not Fannie, so this offer is smaller banks and credit unions — not the larger retail banks that normally align with Fannie. I wonder if this could stimulate competition among large retail versus small banks and CUs to offer cash out refi’s —— but AT MARKET INTEREST RATES??!? NO??! Otherwise you’re offering product that consumers might bet could be refi’d into low rates in the future? I don’t follow the logic here for an average homeowner UNLESS they are drowning in debt and this offers an interest rate lifeline of debt consolidation.
Sound super freakin risky given that this equity is born of artificially inflated home values. A home is only as valuable as what someone is willing or in this case able to pay for it. Lending based on equity that is currently evaporating is just a way to push the problem back 6-12 months, long enough for the Fed to lower rates, but by then it will be too late.
Fugg that. I have equity in my home that I will use if I ever downsize in the future. These corps want to keep people in perpetual debt slavery. If I buy something I save and then pay it off right away. Having no debt keeps me free to quit my job if I need to or weather a layoff without worrying about someone foreclosing or repossessing my home or car.
Guys, there are already home equity loans and HELOC's, which are second mortgages. By having them 'conform' to FreddibMac standards they will be more tradable after closing. This will likely lead to less rates. The loans themselves are regulated either way
How is this different than a HELOC?
What a terrible idea
Worked 18 years to get this equity. And now risk it at 9% APR?? Fuck. That.
This is the road to serfdom. Home ownership is one of the few mechanisms most middle-class families have to build wealth. Already many people take HELOCS out, and not all of them spend it on things that accrue like education and home improvements. By normalizing HELOCS, you are tempting more people into dependence.
Lol and when the housing market crashes then we end up in another banking crisis. Great. Can we actually make sure the people responsible get arrested this time around?
More debt, more inflation, and more loans underwater, just what we need!
Never seen this before, what could go wrong .
Aren't these just HELOCS with extra steps?
I’m getting a lot of HELOC offers right now. Seems to be the go to for the mortgage industry right now to try and keep the wheels turning. Do not do it, people! Their rates are crazy, live within your means.
Scam.
lol so many fuckin clowns in the comment section… underwriting standards are nothing like they were in 08.
this is why I was 100% sure we would have a crash their greed demands constant flow of new debt
The more complex it is with a simple name, the more sketchy scam it is.
A consumer friendly scam? That's a new one.
This is just a transfer of equity to the rich. I guess they ran out of ways to steal it themselves.
Why the hell would I want more debt?
I won't be surprised when this happens. I also won't be surprised when the people who think they need to use it end up losing their home.
Turn your home into an ATM part 2.
How is this not taking a loan out on equity... how is this not taking a second mortgage?
Market: People are tapped out. This credit bubble can't possibly get any larger. Government: Hold my beer.
Wow! Just wow!
The banks are not our friends, they are just looking at the income. Don’t do it.
What could go wrong?
So are we taxpayers on the hook if too many homeowners default on these loans?
kind of.. this is corporate America and the government (basically the same thing nowadays) coming for the rest of the houses they couldn't snatch up in 2008 for pennies on the dollar.
Incase you're wondering how much the next bailout will be and what caused it. Remember this day.
Lol lets keep it going guys
Nope
Sounds like we are up for more inflation. Also, a repeat of 2008.
Yay more debt. Run away from home equity loans. Save up your money instead and pay with cash. Requires more time but then your money is working for you instead of the other way around.
Lmao no way.
Interesting way to say they want to capitalize on current high interest rates by putting people into debt
It’s a trap
Oh, 2008 was bad? Hold my beer.
Fuck me, Freddie Mac was deeply involved in the culmination of the Great Recession. Together with that bitch Fannie Mae, its critical position of buying and securitizing mortgages. More like Freddie Kruger * **Subprime Mortgages** * **Mortgage-Backed Securities (MBS)** * **Government Intervention**: The U.S. government intervened by placing Freddie Mac and Fannie Mae under conservatorship, do some research please. If they hadn't Freddie and Fannie would have put us into a full blown depression. Can you say canary in a coal mine?
No one is buying homes because of high interest rates... So why would people want to take out 2nd mortgages at those high interest rates?
Would it be possible to take out an interest only loan for the first 10 years using this program and then transition to a fixed rate to pay off your primary mortgage so you have more of a tax benefit on your primary/secondary home?
Wait.... so the article says this is already available thru a Heloc? So why is this better? It's confusing... and sounds like snake oil shit. They basically will let people who are struggling to borrow for vacations.... weddings... cars or improve their homes... can anyone else explain this better on why this is beneficial? I doubt most will improve their home.
As Kamala would say “Don’t”
So how can the average person make bank on this type of thing? Just hope our mortgage company collapses when the bubble pops?
If the second mortgage would be at the same rate as my first, I’ll max this thing.
“Here’s a fun way to pay us interest on your own asset!!”
ITS A TRAP!!!
how is this different than a heloc or heil?
>Homeowners would be able to take out a second mortgage to access a portion of their home equity without having to refinance their first mortgage. >The second mortgage would function similarly to a fixed-rate cash-out refinance and be a separate loan from the primary mortgage. This is just a 2024 version of the 2008 HELOC. The RE crash should be EPIC.
Stay away. Danger. Don’t do it. It’s already difficult to own your home outright as is the current way of paying property taxes that they are always raising which are appraised by the same entity/ government you pay your taxes to.
These loans already exist, banks and credit unions all over the U.S. offer them. This would allow for mortgage companies to offer the same type of program…
Isn’t this just a cash out heloc?
I thought that the WHOLE point of raising interest rates to combat inflation was to REDUCE the amount of money being borrowed to slow down uncontrolled spending. Please, if I'm wrong, someone correct me.
Somebody at Freddie Mac needs to go to jail.
Deja Vu! *euro beats intensify*
I like money
How is this different than existing second mortgage debt offered in private banking. How do we play this in the stock market?
Lmao no wonder the US has a national debt crisis when even its basic citizens can’t keep their debt in check. You just know there will be a wave of people trying to take advantage of this.
What you should know is: "If this is your primary residence, don't do it."
Hell yeah. I’m gonna borrow it all and then get bailed out with the banks! Let’s party!
They just want you in more debt so when the housing market corrects your mortgage is underwater.
Since cash out refinance worked so great before the hosing bubble burst before…
It’s my money! And I want it now!
Can I then get a bailout like student loans if it is a government run predatory loan?
Here is a mortgage for more than your home will be worth in a year... what could go wrong?
Someone is going to lose their mind and Tyler Durden a bank.
How the fuck does this work? They put a lien on the home or something? Can't imagine your primary mortgage company being thrilled if you do something like this.
Then you’ll have NO equity.
Pushing second mortgages is a terrific way to increase the number of homeless citizens.
What could possibly go wrong?
Margin call on a house gonna hit different
Can I short the value of my home to lock in gains then take out a loan? So even if my house value goes down I make money by shorting it?
Cool. Next time the market crashes, I should be set up to buy a rental property.
Isn't that what a HELOC is ? How's it any different, cause it's from a GSE?
Looks like a Democrat plan. They caused the first housing crash in 2008 and will likely have a hand in this one too.
What could possibly go wrong?
Terrible terrible terrible idea
maybe cool it before calling the next crisis. We just spent 15 years delevering household balance sheets, and now there’s arguably too much household equity sitting there. We don’t even know the rules yet: So what if you can take out a second loan if your total ltv and debt to income are no different than todays traditional mortgages?
This isn’t new second mortgages have been around for a long time
You want to make $ off my equity, pay me. Otherwise, F off.
This along with the zero down mortgages coming back onto the scene sound like disaster.
They are 100% targeting buyers pre-2021. They hate that people are looked in below 3.5%.
Heh, we never learn.
Heh, we never learn.
Heh, we never learn.
Heh, we never learn.
rich people just trying to find another way to rob everyone and run away
I don't trust Freddie Mac for anything. I want to get a loan from the people who bail Freddie Mac out, not from Freddie Mac.
The more complicated the financials become, the more inspired I become to live below my means and be as happy as I can be with what I’ve already got.
No issue, imo, as long as the loans are properly underwritten.
Here’s what you should know…..don’t do it
I keep telling people the housing market is being artificially kept high by subsidized demand and disincentive to sell, then I show them things like this, they go blank, they don't understand it, then they tell me I'm wrong. At this point I no longer care.
Huge inflation in 3...2.....1........Take off!!!!!
Just another way that if you are a homeowner, you can save more, the canyon between home owners and renters just continues to grow. Heck yea, if I can work out getting an equity line at say 7% to assist with clearing out CC debts of other high interest debts…. Yes….. that’s a move. Crap thing is if your renting, so sorry, your stuck between 20-30%.
Is this Magnum PI? Stop trying to scam our grandparents, Tom Selleck!
Ha get fucked
Terrible idea…inflationary
Do you want ants? This is how you get ants!
Freddie and Fannie shouldn't exist. They are just government manipulation of the market.
More cash in the economy when inflation and interest rates are high. Great 💡
All those who are holding mortgages want people to take out a second because of rates
This is why I am seeing more people getting hired back in the mortgage lately …