On May 2, I told you how Fannie Mae's "declining market" concept was seen by many as just another name for redlining. (See Declining Market Just A New Name For Redlining?). This program requires borrowers in "declining markets" to have 5% more equity in homes they wanted to purchase or refinance if they want to get a loan backed by Fannie Mae.
This policy was strongly denounced by the National Association of Realtors (NAR), who claimed that it was bad for the housing market because it discouraged consumers from buying homes in markets hardest-hit by foreclosures. "It stigmatized communities with lower sales and prices," said Dick Gaylord, president of the NAR.
NAR met several times this spring with Fannie Mae officials and sent letters reflecting members' unease with the policy. “We heard the concerns of NAR and we reviewed and determined that changes in our policy were needed,” said Gwen MuseEvans, Fannie Mae vice president for credit policy and controls.
So, effective June 1, the policy will change, allowing borrowers to get loans up to 95 percent loan-to-value, even in markets in which prices have been falling. “This new down payment policy reinforces our goal to support successful home-owning,” says Marianne Sullivan, Fannie Mae's senior vice president of credit policy and risk management for single-family homes.
No comments:
Post a Comment