Federal Home Loan Mortgage Corporation - Page 34

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                    Q:   Why is that?                                                 
                    A:   Because the assumable mortgage is in place.                  
                    Q:   Does it have value?                                          
                    A:   The assumable mortgage?                                      
                    Q:   Yes.                                                         
                    A:   Yeah.  The value of the assumable mortgage                   
               with regard to the house, which is the asset,--                        
               *    *    *    *    *    *    *                                        
                    A:   --has value.                                                 
          Further, Dr. Kaufman was asked and answered as follows:                     
                    Q:   * * *  Back to my other hypothetical about                   
               the two homes next door to each other, let’s assume you                
               can’t decide which house to buy, the $300,000 one with                 
               no assumable mortgage or the $300,000 house with the 1                 
               percent mortgage.  Market rates are five.                              
               *    *    *    *    *    *    *                                        
                    Q:   Do you think it’s possible to calculate how                  
               much more you would pay for that house with the                        
               assumable 1 percent mortgage?  Is that possible to do?                 
                    A:   I think it’s probably possible.                              
                    Q:   But a buyer certainly would have the tools to                
               determine how much more to pay for the below-market                    
               financing.  Is that right?                                             
                    A:   Not for the below-market financing; for the                  
               house with the below-market.                                           
               *    *    *    *    *    *    *                                        
                    A:   Again, you keep wanting to separate.  I can’t                
               separate that because you’re not going to buy a                        
               liability.                                                             
                    Q:   Let’s say the buyer hired an appraisal                       
               company and had in the buyer’s hand an appraisal saying                





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Last modified: May 25, 2011