[orochimaaru]

If I already have a Fannie/freddie loan - why not allow me to maintain the same rate for the remaining loan and have the new interest rates for any delta. This would encourage movement without all the complexity of this scheme.

The money is already owed to the these entities at that rate. Allow folks to keep the rate on that amount even if they move.

[frumper]

It's owed to these entities at that rate for a specific amount of time. Swapping homes should then mean that the new home is on a payment timeline of whatever the remaining term is, not reset to 30 years. You'd also need to have not increased the loan amount for the math to work out, so either you'd need to sell the old home for more than what the new one costs, or come up with the difference in cash. On top of that, the original loan is backed with the old home as collateral, so the new home would also need to be worth at least as much as the remaining balance.

[orochimaaru]

Yes - I don’t disagree. But provided those conditions are met I’m sure a blended rate could be arrived at that is much lower than market rate.

If the goal is to make it easier to move I think there are options. But I don’t see anyone rushing to exchange a 2.65% loan for 8%. I mean at that rate it makes more sense to rent your home than to sell it.

[frumper]

This blending rate would just be subsidizing the have's at the expense of the have nots. It would be a market advantage to existing low rate holders going into the next 2 decades.

[orochimaaru]

The have’s are at heavily subsidized levels anyway. Anyone who could locked in a low rate in 2020, 2021 and early 2022. I don’t think they intend to move or sell unless the rates are in their favor. Blending allows for that to be possible in a gradual manner. Otherwise we are looking at real estate gridlock for a very long time.

Blending is obviously politically uncomfortable. However, the “have’s” are already at a massive advantage.

[fshbbdssbbgdd]

The fact that some people payoff early factors into the market value of mortgage debt, and therefore the interest rate that is offered. So if it were easier to transfer the debt when moving, the risk profile would be different, and the rate you got in the first place would be different.