![]()
- AIG Board OKs CEO Pay; Benmosche Agrees to Stay
- Half of Banks' Losses May Still Be Hidden: IMF Head
- Deere Reports Quarterly Net Loss, Revenue Falls
- Tiffany Profit Higher Than Expected; Raises Outlook
- Americans Ditch Planes for Trains this Thanksgiving
- Obama Reiterates Commitment to Boost US-India Ties
- FDIC's Bair Cautions on Risks in Bank Break-Up Plan
- Call Me Crazy: Confessions of a Black Friday Shopper
- Turkey Day 101: How Well Do You Know Your Bird?
- Why You Should Play the Reflation Trade: Stock Picker
- Citi Mortgage Reveals What Treasury Won't
- S&P to Hit 1,200 by Year-End: Chief Investor
- Amended Berkshire Hathaway Filing Indicates No Secret Stock Stakes at End of Q3
- Facebook's Biggest-Ever Holiday Shopping Season
- Facebook's New Dual Class Structure - Slow Steps to an IPO
- 5 Big Bank Stocks Investors Should Consider: Strategists
- Gambling Drunk, Texting to Live And America's On Sale - Your Emails
- Nov. 24: Unusual Volume Leaders
MOST SHARED
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Wednesday's Economic News Crunch Could Tilt Markets
- Obama Reiterates Commitment to Boost US-India Ties
- NBA D-League On The Rise
- Australia Wheat Exporters Face Challenges: GrainCorp
- Japan Export Rebound Eases Fear of New Recession
- Starbucks Eyes China as Next Major Market
- Stifling Anger at Work Can Kill, Survey Finds
- The Social Media Gaming Threat
Mortgage borrowers, who thought higher loan limits for Fannie Mae [FNM
Loading...
()
] and Freddie Mac [FRE
Loading...
()
] would mean better terms, are getting an unwelcome surprise.
"Closing Bell" host Maria Bartiromo spoke with two mortgage brokers from regions with high home prices.
They said forget Fannie and Freddie -- FHA loans are becoming the way to go for their customers.
Why? Mitchell Ohlbaum, president of Los Angeles-based Legend Mortgage, said the only plus for Fannie and Freddie is the higher limit -- up to $729,500. After that it's all downhill.
Cons
-Manual underwriting vs. electronic
-Lower debt-to-income ratios than traditional conforming
-Only 30 and 15 year products
-No interest only
-Cannot payoff subordinate liens that were not purchased with money
-Pricing is higher than expected
Ohlbaum said he's steering more customers into loans offered by FHA. He said the rates are slightly better, loan-to-value ratios are higher and underwriting is completed electronically.
And at a time when consumers' credit scores are getting "beaten down harder than a piñata," Ohlbaum FHA mortgages don't have as high a threshold as their Fannie and Freddie counterparts.
So what's it going to take to make Fannie & Freddie more competitive?
New Ideas
Fred Glick, president and chief executive of Philadelphia's US Loans Mortgage has some ideas:
1. Permanently raising the limit so there's confidence for investors to buy the paper.
2. Open the market to more FHA originators by changing the requirements(HUD requires mortgage brokers to have a lot of net worth and have a lot of paperwork)
3. The National Association of Realtors is floating around a proposal to give people a tax credit for buying property.
"I think people need to have a grant program, they need cash in hand -- say, 10 percent -- would be a much better way to go and they'd have to stay in the property for a certain amount of time," said Glick.
- Remember when auto shows were major events where new models could generate buzz?
- CNBC’s Mike Huckman visits a cutting-edge plant to see how the flu vaccine of the future is being made.
- People who bottle up their anger at work are up to five times more likely to suffer a heart attack, a study found.
- Playboy will outsource its publishing operations in a bid to become profitable again.
- A new McDonald's in Manhattan is the nation's first to sport a sleek, chic interior imported from stores in London and Paris.
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.












