New Government Action to Rescue the Housing Market Just Happened

Fannie Mae Changes Policy and Pricing on "Conforming" Jumbos

Fannie Mae announced a series of new initiatives called "Keys to Recovery" in its first quarter 08 report. This effort is geared toward basically providing liquidity, stability, and affordability to the housing and mortgage markets for the long term, keeping struggling borrowers in their homes, assisting prospective home buyers with home purchases, and stabilizing communities affected by the mortgage market downturn. According to the report, the initiatives include:

1) A new refinancing option for up-to-date but "underwater" borrowers with loans owned by Fannie Mae that will allow for refinancing up to 120 percent of a property's current value;

2) A renewal and expansion of the company's partnership with the state Housing Finance Agencies to provide $10 billion in financing for qualified, first-time home buyers;

3) In partnership with Self-Help Credit Union, a new initiative that allows families in hard-hit communities to reside in foreclosed properties on a rent-to-own basis, and

4) New jumbo-conforming loans will be priced flat to conforming for portfolio asset acquisition through the end of the year.

We'll see what this actually does for us, but hopefully, we'll get something great moving even further with this market.  Stay tuned.