Home Owners Pay for Payroll tax Cut

The Government Giveth, and The Government Taketh Away!

I was walking past the City Hall in Irvine and realized I was in the midst of the “OCCUPY IRVINE” group.

I smiled and walked on, then a gentleman stepped in front of me and TOLD me,
“I bet you are part of the 1%,”

“Actually”, I smiled, “I am part of the bottom 30%”,

He thought about that as I walked around him.

“I thank you for the extra expense you added to my home mortgage.”

I turned toward him as walked on by.

He still looked confused.

Here is how it works,

On Friday Congress unanimously approved the two month extension of the 2% reduction in the employee contribution to Social Security as well as a temporary extension of the 99 weeks of unemployment benefits.

Ok that sounds good.

But what the Government giveth, it will also taketh away.

Homebuyers will pay the cost of this program, ($33 Million estimate).

The cost was added to the “Fees” lenders PAY on Freddie Mac and Fannie Mae loan guarantees.

Lenders pay about 27 bases points for the loan guarantee.

The new payroll tax bill would add 10 more basis points to the process, this according to the Mortgage Bankers Association.

Ok, Occupy folks would say “Hey it’s a small price, about $12 a month or $4000 over the life of a $200,000 loan.”

This will be imposed on Freddie and Fannie loans until 2021.

Once again homeowners get stiffed.

Living in Tent, maybe the next step.

John Hacker

and info from the OC Register.