Most of those low-rate loans are being sold to Fannie Mae and Freddie Mac — the taxpayers’ mortgage arm. The “private” market simply skims a portion of every transaction while working as the middle-men.
Personally, if taxpayers are the ones shouldering the burden, there should be no middle-men; the govt should make direct loans and charge whatever fees necessary to cover origination costs (and pay their employees an hourly wage, no commissions).
Again, this is another example of the corporate welfare given to the financial industry. How much extra money are consumers forced to pay just to get a conforming loan? Why do we have to pay the higher price (points/fees and/or higher rates) when the originators (and everyone in between) are totally unnessary? The financial industry buys the politicians so that we are forced to use their services.
