"Ackman pitched two potential options: borrowers would choose between a standard 30-year mortgage at about 6% with no restrictions, or a lower-rate loan around 5.35% that includes penalties for refinancing early. Ackman proposed that the discounted loan could be portable, allowing it to be assumed by a new buyer if the home is sold, avoiding a penalty on sale."
"As you know, commercial mortgages work this way. Why couldn't the same approach be used for home loans? Ackman's proposal comes at a time when housing affordability is front and center for the Trump administration as home prices and borrowing costs remain elevated. In recent weeks, Trump has directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities (MBS), a move he said is intended to bring mortgage rates down."
Ackman offered two mortgage choices: a standard 30-year mortgage around 6% with no restrictions, or a lower-rate loan near 5.35% that imposes penalties for early refinancing. The discounted loan could be portable and assumable by a new buyer on sale to avoid prepayment penalties. Locking in the 65-basis-point savings upfront could determine a borrower's ability to afford a home. Commercial mortgages already permit similar structures. The proposal arrives amid concerns about housing affordability as home prices and borrowing costs stay high. Recent directives instructed Fannie Mae and Freddie Mac to buy $200 billion in MBS to lower mortgage rates. Ackman discussed related policy ideas with White House officials and company executives.
Read at www.housingwire.com
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