Competing plans to wind down Fannie and Freddie would both raise borrowing costs

Homebuyers would pay more for a mortgage if a bipartisan plan put forward in the Senate to wind down Fannie Mae and Freddie Mac but keep a government backstop for mortgage securitizations becomes law, says Moody’s Analytics Chief Economist Mark Zandi. But they’d pay even more if a plan put forward by House Republicans to pretty much get the government out of mortgage lending took effect.

Zandi says the Senate proposal would add about $75 a month in extra interest payment on a $200,000 conforming loan, while the House plan would cost the same borrower $135 a month. President Obama Tuesday said the plan put forward in the Senate is aligned with “four core principles” he sees as essential elements of housing finance reform. Source: usatoday.com.