The Cost of Surrendering the 30-Year Fixed Rate Mortgage Loan

Photo of Wake Forest Law Professor Tanya Marsh posing in the Worrell Professional Center

Tanya Marsh joined the Wake Forest faculty in 2010, following a ten-year career practicing real estate and corporate law in Indianapolis, Indiana, including nearly five years as the Vice President of Legal for Kite Realty Group Trust, a real estate investment trust traded on the NYSE. Tanya teaches real estate transactions and property.

Professor Tanya Marsh’s latest post on the Huffington takes on the New York Times and the 30-year fixed rate mortgage.

“The New York Times ran a story earlier this week suggesting that if Fannie Mae and Freddie Mac cease to exist, the 30-year fixed-rate residential mortgage loan would become a “luxury” product rather than the norm. This kind of shift could have profound economic consequences that policymakers need to carefully consider.

“As the story noted, the 30-year fixed rate loan is an aberration that exists primarily because of government support. There are three key characteristics of the now-typical loan that merit discussion: (1) its long-term nature; (2) the fixed interest rate; and (3) the full amortization.”

Read the full story on Huffington