Post by Ken Grech, a top Simi Valley real estate agent. Search Simi Valley real estate listings. South Florida Sun-Sentinel, From News Services:
Mortgage finance company Fannie Mae is tightening standards for the adjustable-rate and interest-only loans that fed the housing boom and contributed to the bust.
The company said it will require mortgage lenders to consider how high a borrower's mortgage payments might rise after teaser rates expire.
Fannie Mae said it will enact tighter standards for "interest only" loans that allow borrowers to avoid making principal payments for several years. To obtain those loans, borrowers taking out new mortgages must have a down payment of at least 30 percent and enough assets for two months of living expenses.
Fannie Mae's new rules, which go into effect in September, affect loans that adjust in five years or less.
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