Impacted markets across the nation have been categorized, with Category 5 being the highest risk for declining market value and Category 1 markets currently demonstrating more stable market values. Those counties in a higher risk category are subject to additional guideline restrictions as described below. Click here to view a list of the counties currently attributed* to Soft Market categories 1-5.
The following Soft Market policy became effective January 18, 2008:
Conforming, Non-Conforming, Expanded Approval (EA), and Conventional Bond loans:
Soft Market Category 4-5 loans | |||
Maximum financing will be reduced by 5% | |||
Soft Market Category 1-3 loans | |||
Maximum financing will be reduced by 5%, only if the appraisal or appraisal review indicates any of the following: | |||
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For the above categories, if the loan is already 5% below the maximum allowable financing, no further reduction is required.
Home Equity**
Soft Market Category 5 loans | |||
Maximum financing will be reduced by 10%, unless the loan is already 10% below the maximum allowable financing | |||
Soft Market Category 4 loans | |||
Maximum financing will be reduced by 5%, unless the loan is already 5% below the maximum allowable financing | |||
Soft Market Category 1-3 loans | |||
Maximum financing will be reduced by 5% (unless the loan is already 5% below the maximum allowable financing) if the appraisal or appraisal review indicates any of the following: | |||
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Products / Programs Not Impacted | |||
FHA / VA | |||
Rural Housing | |||
Bond programs using government or Rural Housing loan programs | |||
Reverse Mortgages |
Pipeline Protection
The new Soft Market Policy is effective on all loans locked after Friday, January 18, 2008. Loans locked prior to the end of day on Friday, January 18, 2008 are not subject to the new policy. Those loans must meet all pre-existing Soft Market Policy requirements and must fund by March 18, 2008.
Lock extensions may be granted as long as the loan funds by March 18, 2008 and meets all other pipeline protection rules".
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