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Fannie Mae and Freddie Mac at it Again - Jeremy Williams of Keller Williams Realty NE

As the word on the street that the housing market has possibly found a bottom, Fannie Mae and Freddie Mac are at it again. Buried in H.R. 2454, know to most as Cap and Trade, are some new and interesting “creative financing” wizardry by our politicians, specifically those “concerned” with Global Warming. In an act that is sold to the US citizens as an act to create clean energy jobs, achieve energy dependence, reduce global warming pollution and transition to a clean energy economy, this is really a taxation ploy wrapped in the language of a “crisis mode community organizer”. Using fear, scientific data that is not allowed to be challenged, and utilizing the support of big business that will find financial gain from this act to , one should read carefully for themselves H.R. 2454 to discover the truth that was haphazardly pushed through Congress and will soon be before the Senate for a vote. This is neither a Republic or Democratic issue, but one that we all will pay for substantially if it is passed. I urge you to read the act, and if you feel the same way, contact your local representative while there is still time. This act is cumbersome, which causes me to question if our representatives really took the time to read all the details.

Back to Fannie Mae and Freddie Mac. They are introducing “Energy-Efficient Mortgages” and “Location-Efficient Mortgages”. I had never heard of anything of the sort being in the business now for sometime so luckily they provided definitions in the act.

The term “Energy Efficient Mortgage” means a mortgage loan under which the income of the borrower, for purposes of qualification for such a loan, is considered to be increased by not less than $1 for each $1 of saving projected to be realized by the borrower as a result of cost-effective energy-saving design, construction or improvements (including use of renewable energy sources, such as solar, geothermal, bio mass, and wind, super-insulation, energy-saving windows, insulating glass and film, and radiant barrier) for the home for which the loan is made. So essentially those that will benefit from the loan made by the quasi government agencies (proped by your tax dollars) influenced by government policy are those that seek homes that meet the standards set forth by the government. So in an underhanded way, the government is using policy to condition what type of homes the consumer will buy in the market place.

The term “Location-Efficient Mortgage” means a mortgage loan under which the income of the borrower for purposes of qualification for such a loan is considered to be increased by not less than $1 for each $1 of savings projected to be realized by the borrower because the location of the home for which loan is made will result in decreased transportation costs for the household of the borrower; or the sum of the principal, interest, taxes, and insurance due under the mortgage loan is decreased by not less than $1 for each $1 of savings projected to be realized by the borrower because the location of the home for which loan is made will result in decreased transportation costs for the household of the borrower. The government in this instance is creating policy to condition people to purchase homes in an area that they might not otherwise purchase essentially controlling the strings to the purse. I am sure that these loans will not be for those that choose to live in the suburbs because their commute would add to “Global Warming” concerns.

Oh, and guess what, these loans will all be sold in blocks to investors in a secondary market. Hmmm… that sounds familiar. That is essentially what was done in 2005 - 2007 with loans created so that everyone could buy a home. I thought owning a home was not a right, but a priviledge. What amazes me is that a lot of the people creating the policies or that have their hands on the purse strings are career politicians. They have never run a business because if they did they would know the impact this bill will have on small businesses and households in general throughout the country. Unemployment is currently at 9.5%, you know that number is only going to get worse with the items in this act coming down the pipeline.

We are told by our representatives about the cost savings, but common sense prevails and the cost of this act will only be passed along to you and me. I have only mentioned the two types of mortgages conjured up in this act. Read for yourself about the tree planting program, the language opening the door to require energy audits prior and post any rehab or improvement that involves a reduction in energy consumption, the new standards and code proposals for the building industry (guess who those costs are going to be transferred to), and the smart grid. This is all the tip of the ice berg. Read it. It is important. As a Realtor, I see how this is going to impact me as a business owner, as a family, and how it is going to impact our country.

What is your take on H.R. 2454? Post your comments.

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Jeremy Williams of Keller Williams Realty NE specializes in residential real estate in the northeast Houston area including Kingwood TX, Atascocita TX, Humble TX, Fall Creek, Summerwood, and Eagle Springs. Whether buying or selling a home, see why clients have chosen to trust Jeremy with their real estate needs. To learn more about the real estate services Jeremy Williams of Keller Williams offers his clients and customers, visit http://www.williams4yourhome.com/ or read more at Jeremy’s Active Rain blog. Utilize the searches below to see what is happening in your neigborhood, or search for your next dream home.