Fannie Mae Passes Tougher Mortgage Guidelines

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Posted on in Housing Market

Fannie Mae Passes Tougher Mortgage Guidelines

Getting approved for a mortgage is about to get harder.  For the second time in less than 3 months, Fannie Mae announced changes to its mortgage guidelines.  In its official announcement, Fannie Mae details the updates, meant to reduce the mortgage firm’s overall risk. The first major change is with respect to credit scoring.  All Fannie Mae loans — whether underwritten electronically or manually — require a 620 credit score minimum.  There are very few exceptions. A second change relates to loans with private mortgage insurance.  Homeowners whose loan-to-value exceeds 80 percent now have a choice: Accept higher mortgage insurance premiums month-after-month Accept a one-time fee paid at closing to compensate for higher risk Both options pass higher costs to consumers. Then, a third change relates to maximum debt-to-income ratio.  As announced in a separate document, Fannie Mae will no longer approve expense ratios exceeding 45 percent except with very strong assets and credit to back it up.  In no case can expense […]

by jberman
Posted on in General

Weekly Twitter Digest for 2009-09-29

Mortgage brokerages' suits target Colo. state probe – Denver Post http://ow.ly/15Q593 # Immigration Reform Forum in Aurora, Colorado – Huffington Post (blog) http://ow.ly/15QbHd # Enhance Mortgage Corporation, Real Estate Note Buyers, Expands … – Free Press Release Center (press release) http://ow.ly/15Qo1O # Viva Las Vegas! A message from NAMB/WEST 2009 Committee Chair Joe … – National Mortgage Professional Magazine http://ow.ly/15Qq9w # Intraday rate improvements. Hip hop hurray! # Was NAMB asked to be at this table? http://ow.ly/qCxI – NAMB warned early & often about the dangers of HVCC – #namb #hvcc @Namblive? # Toll Brothers Announces National Fall Sales Event — Home Buyers … – PR Web (press release) http://ow.ly/15QBq2 # The Dramatic Increase In Mortgage Fraud: SubPrime Crisis Brings … – Real Estate News | BiggerPockets.com (blog) http://ow.ly/15QDmw # #FOMC, Much Ado About Nothing. More of the same. Carry-on. # Understanding today's Federal Reserve Statement (JBermanGroup Blog) – http://ow.ly/qK3G # MONEY MARKETS-US rates slip as Fed pledges support – […]

by jberman
Posted on in Housing Market

Existing Home Supply Falls By Nearly A Year

As reported by the National Association of REALTORS®, the number of Existing Home Sales dipped last month, ending the metric’s 5-month winning streak. Newspaper headlines today are overwhelmingly negative on housing. You’d almost believe this year’s housing recovery had ended. That’s hardly the case. See, the other side of the Existing Home Sales story is that — while the number of units sold did fall by 3 percent — the months of existing supply fell by nearly a year. To home buyers and home sellers, this is huge.  Home prices are based on supply and demand and with supplies plummeting, it means that home prices are poised to rise. Indeed, dwindling inventory isn’t “news” to today’s buyers.  Multiple offer situations have been common since the start of the summer and, should supplies fall further, they may soon be the home-buying rule rather than the exception. Since peaking in November 2008, existing home supplies are down 23%. Mortgage Rates are near annual lows. If you are […]

by jberman
Posted on in Mortgage Rates

Understanding The Federal Reserve Statement (September 23, 2009 Edition)

The Federal Open Market Committee voted to leave the Fed Funds Rate within its target range of 0.000-0.250 percent. It also reiterated plans to support the mortgage market to the tune of $1.5 trillion. In its press release, the FOMC noted that the U.S. economy is “picking up following its severe downturn” and that financial markets have “improved further”. It’s the second consecutive post-FOMC statement in which the Fed appears somewhat optimistic — a signal that the recession will end soon, or has already ended. That said, the economy still has some soft spots and the Fed made a point to single them out.  Each poses a distinct threat to economic recovery. Ongoing job losses Sluggish income growth Tight credit conditions Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period” and to honor its $1.25 trillion commitment to the mortgage bond market. However, the FOMC changed its timeframe on the […]

by jberman
Posted on in Mortgage Rates

Should You Lock Your Mortgage Rate In Advance Of Tomorrow’s Federal Reserve Announcement?

The Federal Open Market Committee starts a 2-day meeting today in Washington.  The scheduled get-together ends at 2:15 PM ET Wednesday after which the FOMC will issue a press release to the markets. Consider locking your mortgage in advance of the press release.  The FOMC meets 8 times annually and its adjournments are among the biggest market-movers of the year.  The Fed’s post-meeting press release is a direct look into the mind of the Federal Reserve and Wall Street is looking for clues anywhere it can find them. After its August 2009 meeting, the FOMC said in its press release: Financial markets have improved, relative Household spending remains constrained Although weak, the economy is “leveling off” Since then, however, credit risks have lessened on Wall Street, consumer spending have shown signs of life and Fed Chairman Ben Bernanke said the recession is “very likely over”. This is why tomorrow’s FOMC press release is so important.  Markets don’t expect the Fed to raise or […]

by jberman
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