Recently (and I'd say somewhat unceremoniously given the importance and need for the announcement), Fannie Mae and Freddie Mac announced the easing of Financing Guidelines ... including the news that they're bringing back the 3% Down Payment - Conventional Mortgage.
Good news, no doubt about it. But even more changes are needed ...
Mortgage Lenders and Agents (and the public) are still anxiously awaiting the much-needed relief demanded to relax the tougher standards that came as a result of the housing recession/crisis that arrived in the mid-2000's. A crisis from which we are still healing.
Perhaps slow, stagnant sales numbers and housing-sales statistics have finally caught the attention of the "powers-to-be" and that's why we're finally seeing Fannie and Freddie take action? Facts prove the housing market has not come back to good or robust health.
While it's true some areas of the country are doing better, collectively things are still not as they COULD or SHOULD be. Although better, Mortgage Lenders are still somewhat reluctant to freely lend money. There's a reluctance by potential Sellers to list their homes, or lower prices if they did. Buyers are slow to seek financing or to actively view homes to buy.
As a result, there are fewer Real Estate Transactions being conducted in the current market. And while less demand typically means stable prices ... it generally means an over-supply of properties too.
What would remedy the imbalance we're currently seeing?
A loosening of financing approval standards would definitely help. It would allow:
- Deserving Home Buyers to buy
- Home Sellers the ability to move on .. move up
- Baby Boomer Home Sellers the ability to achieve a retirement goal
- Mortgage Lenders would have the ability to lend more easily without constant worry about nitpicking details. They would be capable of focusing on the larger picture and things that truly matter and facilitate Closings
Bottomline: It's time to see the pendulum swing back ... and in the favor of the voice of reason. That certainly doesn't mean a return to the loose lending standards found prior to the housing downturn.
A voice of reason, commonsense mortgage lending would be lending as Goldilocks considered ... "just right". Right now no one seems to know what "just right" is or should be.
One thing is obvious to me. Home Buyers and current Home Owners need to know what the benefits of homeownership are. They have to want to be Home Owners. And they certainly need to face fewer fears or stresses during their Mortgage Process.
That won't happen as long as Mortgage Lenders themselves remain under the tremendous number of regulations and pressures they currently deal with. If Lenders remain under the stringent and highly-stressful regulations the government and regulatory entities now place on them, clients and others within the industry will continue to feel them too.
The recent announcement recently made by Fannie Mae and Freddie Mac is a hopeful start ...
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