Cost of closing loans has increased 100%.

Today, out of the blue, many lenders closed Private mortgage insurance.

This is scary: many lenders closed will not accept 740 ficos and 20% equity. Regardless of what the govy wants, there has to be a buyer for this paper.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aoGAicgx.trY&refer=us

The officials must have consulted the Wall Street “analysts” who the MSM is always saying were shocked when this or that report comes in below “expectations”.

I’m wondering if being "expliciter" will even help.  I saw this comment in a Forbes article today:

Lower interest rates obtained by refinancing could spark a wave of pre-payments on mortgages. That would spell bad news for investors who own mortgage-backed securities guaranteed by the companies and who make money when rates are higher.

“It may also have a detrimental effect on [mortgage-backed security] pricing because investors will be worried about prepayment,” says Guy Cecala, publisher of the trade publication Inside Mortgage Finance. In other words, it raises questions about who will buy the companies’ mortgage-backed securities.

Taxpayers don’t get off the hook either. "At some point the government will have to take all the bad mortgages and [mortgage-backed securities] off the balance sheets of Fannie and Freddie," says Peter Wallison, a fellow at the American Enterprise Institute who has studied the mortgage buyers in detail. "That’s where the taxpayers will recognize the loss." At that point, he says, Congress will likely want to recreate the Fannie and Freddie as government-sponsored entities.

The Obama administration may find that this doesn’t work as well as they thought.