If Congress shuts down Fannie Mae and Freddie Mac, borrowers likely will end up paying slightly higher mortgage rates, according to a recent study by Moody's Analytics.
Mark Zandi, chief economist at Moody's, suggests that typical borrowers could pay about $75 per month in extra interest payments-or about half a percentage point more-under the Senate proposal, and about $135 more under the House plan. That could be the average on a conforming loan of about $200,000 with a 20 percent down payment.
The House GOP bill would virtually privatize the mortgage market, while the Senate's bipartisan plan would limit Washington's role in insuring mortgage securities and retain the federal government as an insurer of last resort.
Both plans are meant to shift more mortgage financing risk from the government to the private sector in order to prevent future taxpayer-funded bailouts.