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fannie mae is on board

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Mortgage and Lending

Fannie is finally reacting to the market.  They have been pulling back from doing loans in markets that they determine are "declining in value"   Making it very hard for particularly new homeowners to enter the market.

This succeeded in putting many new buyers into and FHA mortgage. This is not necessarily a bad thing.  FHA only requires 3% down and allows the seller to pay ALL the closing costs vs 3% for Fannie/Freddie.  Theri rates have been better lately that the conforming and PMI is lower due in part to the upfront MI that FHA charges and finances in the mortgage.

They are finally turning around and saying that even if the market is "declining" they will still do 5% down if this is your primary residence.

 

Comments (3)

Clint Jacques
Exit Mountain Realty - Brevard, NC

Good information.  Thanks for the tip.

Jun 02, 2008 11:57 AM
Susan Hilton
CENTURY 21 Beal, Inc. - College Station, TX
Texas Aggie Real Estate, College Station Bryan Texas Real Estate

Sometimes I'm seeing markets tagged as being declining even though it is not. I'd sure like to see a map marked up showing what they think is declining and why.

Jun 02, 2008 12:12 PM
Anonymous
Anonymous

 

Each of the PMI Companies as well as Fannie & Freddie have their own idea of what is declining. And the the LO has to watch all of these.

Here in NH we are seeing that the lower end of the market seems to have rebounded. Not to where it was, but not declining any more. The next level up may be leveling and the higher end may not have reached a plateau yet. Appraisers realize this and are marking their appraisals as such.

BUT the MI companies and Fannie/Freddie do not note differences between various price ranges. Writing mortgages has become a very big challange tracking the guidelines

Jun 02, 2008 12:29 PM
#3