As most of you are aware, in 2007 there have been unprecedented changes in the market, including declines in national home prices that are expected to continue through the end of 2008. Delinquency rates are rising across the country, and credit losses are increasing, primarily as a result of higher severity and home price declines.
The purpose of this announcement is to make you all aware of the certain pricing adjustments going to be made on loans purchased on or after March 1st 2008.
Fannie Mae is implementing new loan-level pricing adjustments that will apply to mortgage loans with various combinations and risk characteristics:
- A range of loan-to-value ratios combined with certain representative credit scores
- Subordinate financing structures with certain representative credit scores and/or interest-only amortization features; and
- Two-unit properties
New Loan-Level Pricing Adjustments of 70.01% and above, with certain representative credit scores, as follows:
Credit Scores | Pricing Adjustments |
Below 620 (or missing credit score) | 2.00% |
620-639 | 1.75% |
640-659 | 1.25% |
660-679 | 0.75% |
It may be a good time to check your pipeline and see who may fall in the criteria of borrowers listed above. It may be harder for certain borrowers to obtain mortgages after March 1st 2008.
Feel free have your borrowers call for a free credit report or a free rate quote any time!
Anthony V Frustaci
Loan Officer
1st Mortgage Corporation
19615 Liverpool Parkway
Cornelius NC, 28031
704-944-0444 (Office)
704-779-7911 (Direct)
704-944-9460 (Fax)
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