PAYROLL TAX CUT
This week we are met with a Senate bill that antes up a two month extension to the payroll tax cut at the expense of homeowners!
The bill continues the reduced payroll taxes to particularly the middle class and extends unemployment benefits to others. It moves on to the House where hopefully it will NOT pass.
If the bill does pass the way it is now, then give the home owner who refinances next year, or buys a home a big hug.
Orchestrated by Kentucky's own Mitch McConnell it grants a mere two month extension to the payroll tax bill, and it is being paid for in large part by extra fees to Fannie Mae and Freddie Mac. In the past perhaps this was not so meaningful to most of us because we did not pay so much attention. Now, those of us in the housing industry snap to attention at the mention of Fannie and Freddie.
Prior to the mortgage meltdown if one was not doing a special program, or investment property there were no extra Fannie Mae fees. Now since the meltdown, even those with credit scores over 740 can be subject to extra fees, called loan level price adjustments, with a 620 credit score the fees are outrageous. It is the agencys' way of getting on the road to solvency again.
It does not take a rocket scientist to realize fees charged to Fannie and Freddie will be passed on to home owners when they buy or refinance. What are our Senators thinking? Do they not realize we are in a HOUSING CRISIS in this country?
There are plenty of well qualified home owners right now who do not get to take advantage of the record low interest rates because the loan level price adjustments make it not feasible. Meantime, another Senator, David Vitter, LA, is asking FHA to up MI to the highest level allowed.
How does this help housing recovery? How can our Senate be so out of touch with reality?
