Just look at the numbers! It’s clear why the lenders don’t care. They are made whole and we pay the price
RM Example:
Directly from the Federal Reserve website. Notice the fee total of $11,625. Notice there is no line for “commission”. I can guarantee you paid it. The house was valued at $275,000 and mortgage-free. Also, notice the total owed after 5 and 10 years. EYE POPPING!
“Account Opening Fees:
Loan Origination. $4,735
Inspection. $500
Title Search & Insurance. $595
Appraisal. $295
RM Insurance Premium. $5,500 (if your home valued higher, it’s 2%)
TOTAL: $11,625
Also, monthly fees:
Servicing Fee: $35/mo.
RM Mortgage Premium: 0.5% annually
Monthly Interest charges on the draw.
Initial line of credit was $186,974
Amount owed after 5 years: $51,025 + $186,974 = $237,999
Amount owed after 10 years: $97,764 + $186,974 = $284,738”
Can you imagine how much the taxpayers are going to be on the hook for after 15, 20 or even 25 years depending on the age of the borrower and their life expectancy?
Answer: Billions
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