The Wall Street Journal is reporting on an idea floated by the Federal Housing Finance Agency that would make the rates paid by borrowers in states with long foreclosure processes higher than the rates paid by borrowers in states with shorter foreclosure processes. At this point the Agency, which regulates mortgage giants Fannie Mae and Freddie Mac, has said only that it intends to seek public comment on the idea. No details have been provided and no specific plan has been proposed. The idea flows from the wide disparity in state foreclosure timelines. Foreclosures in some states have bogged down in the foreclosure crisis, with some foreclosures now taking years. And those delays cost lenders money. While the idea has some appeal, an attempt to link mortgage rates to state foreclosure timelines is expected to meet stiff political pressure. It’s all part of the brave new world produced by the recent mortgage meltdown
