If you want a 75.1% cash-out loan up to the conforming limit of $417,000 and your credit score is 670, your combined extra charges will be 2.75% (points) of the loan amount. It doesn’t simply end there; if you have units or a non-owner occupied property, there are substantially higher costs. These costs do not include any lender or broker charges. The answer: either improve the heck out of your credit or take a 10- or 15-year loan. As another incentive, the 10- or 15-year are lower in interest as well. These newer and larger charges are just now taking effect and we haven’t yet seen the reaction to them.

So, do the chicken, the egg and the big bad wolf live happily ever after? We are a nation of strong men and women who have faced many problems and overcome them. I believe this will happen again and I am already seeing some turnaround. What Fannie Mae and Freddie Mac have done with these fees is certainly no help to the recovery, but market forces in the long run will prevail and Fannie and Freddie will have to adjust as well. Because this isn’t the end of the story, more columns will follow tracking the progress of real estate/lending and Fannie Mae/Freddie Mac adventure.