Great news coming out of the housing policy world. It seems housing policy advocates have one a victory regarding Fannie Mae’s changes to the declining market policy.
And this is fabulous news for low and moderate income home buyers and others who might be looking to buy a home in markets that might have been percieved as declining…
4 responses so far ↓
Tom Lindmark // May 17, 2008 at 4:16 pm |
The initial reaction we got from some lenders was, ” so what”. Fannie can lower all it wants but until the MI companies get on board it means nothing and they’re standing pat right now. After all they are the ones that take the risk, not Fannie or Freddie. Just a lot of Washington grandstanding in this one.
Ghazala Khan // May 17, 2008 at 6:31 pm |
Interview Request
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Ghazala Khan
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K Nicole Jones // May 20, 2008 at 6:36 pm |
Well, Tom. This time, I do disagree. I think what I have seen is that many banks and mortgage lenders have been using Fannie’s Declining Market policy as a way to say “well, Fannie is doing it, so it must be okay.
Fannie’s mission is to provide access to capital in the homebuying market and the multi-family market that might not otherwise happen. Ignoring the fact that slip shod underwriting, and poor appraisal standards have a lot to do with this, and pinning it more on “joe schmoe” homeowner, will not solve the fundemental credit standards that have been allowed to fall wayside and encouraged great speculation among the “Alt-A” borrower who have abandoned and defaulted at a greater rate than everyday Joe–who has defaulted most frequently under financial duress due to job loss, etc.
Tom Lindmark // May 20, 2008 at 7:06 pm |
Kris, Maybe you misunderstood my comment. I was trying to make the point that by law Fannie is precluded from purchasing mortgages that have less than a 20% down payment unless those mortgages have mortgage insurance. If the MI companies choose not to insure 97% mortgages then Fannie can’t purchase them regardless of what Fannie’s guidelines might be.