Realtors Worry Mortgage System Overhaul Will Send Rates Up

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Updated: 7:25 PM Feb 11, 2011

While the U.S. Treasury Department is laying out options for overhauling the nation's mortgage lending system, Charlottesville realtors are weighing the impact of what could be a major shake-up in the way people buy new homes.

Posted: 2:25 PM Feb 11, 2011
Reporter: Stephanie Satchell
Email Address: stephanie.satchell@newsplex.com

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February 11, 2011

Charlottesville realtors are weighing the impact of what could be a major shake-up in the way people buy new homes.

The U.S. Treasury Department is laying out three options for overhauling the nation's mortgage lending system. The report describes a path for winding down the troubled mortgage giants Fannie Mae and Freddie Mac. The options are: ending the government's role in guaranteeing most mortgages; supporting the mortgage market only in times of stress; or providing a government guarantee for mortgage investments created by private companies.

Michael Guthrie, CEO of Roy Wheeler Realty, says any change will almost certainly force mortgage rates to climb.

"As the government starts releasing their hand from keeping interest rates down and trying to help the housing industry recover, you're going to see interest rates go up," he explained.

The Obama Administration believes the government should withdraw its support for the mortgage market slowly over the next five years or more.

The final decision on the mortgage lending system will be left to Congress.

Latest Comments

Posted by: jo Location: c-ville on Feb 11, 2011 at 06:52 PM

Realtors are only worried about there 6 %, fan & mac caused this housing messs. Gov should pull out & rates should go up to coves banks costs for mortgage insurance so taxpayers do not have to pay for gain for agents & other housing crooks.

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