Under the new guidelines, even applicants who assumed that their FICO credit scores would get them favorable rates will be charged more unless they can come up with down payments of 30 percent or more.
As long as the federal government continues to indicate they are willing to redraw the promises contained in mortgage loans, investors will be wary of buying more mortgage bonds. Hence the interest rates on mortgages will stay higher than normal. That’s how the Real Estate Center’s Chief Economist Dr. Mark Dotzour sees the recent government takeover of Fannie Mae and Freddie Mac.
The federal government has taken control of twin mortgage giants Fannie Mae and Freddie Mac and the $5 trillion in home loans they back.
Fannie Mae and Freddie Mac, the biggest sources of financing for U.S. home loans, have reached an agreement with New York Attorney General Andrew Cuomo to buy mortgages only from lenders that adopt new standards intended to ensure independent home appraisals.
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