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Thursday, February 5, 2009

Fannie Mae: What Standards?

WTF? Loosen standards?

Are there even any standards to loosen? I vote we should suspend mark to market for housing! Giddy up!

Fannie Mae to Loosen Rules for Home-Loan Refinancing (Update2) : " Fannie Mae, the mortgage-finance company under U.S. government control, will loosen rules for homeowners seeking to lower their loan payments by refinancing.

Fannie Mae will drop some credit-score requirements, reduce income-documentation standards and waive the need for appraisals in some cases, according to a notice yesterday to lenders posted on the Washington-based company’s Web site. The changes apply to loans that the company owns or guarantees.

The company, which accounts for more than 40 percent of the $12 trillion in U.S. residential mortgage debt, is seeking to break a "logjam" in refinancing and allow more homeowners to take advantage of near-record low interest rates, according to Brian Faith, a Fannie Mae spokesman. The increased flexibility for consumers isn’t large enough to significantly harm mortgage- bond investors and mortgage insurers, analysts said.

"This is not yet the no-appraisal refi wave that many have feared," Matt Jozoff and Brian Ye, mortgage-bond analysts at New York-based JPMorgan Chase & Co., wrote in note to clients yesterday.

Fannie Mae’s appraisal change doesn’t mean borrowers with less than 20 percent home equity can forgo mortgage insurance, the analysts said. That’s because Fannie Mae will likely use automated models to check home values listed on applications before offering to waive appraisals, the analysts said.

The company’s DU Refi Plus program will start April 4."


TulsaTime said...

Hail yes, no inspect refi to that 4% fed standard mortgage...i just may survive on this $12/hour job after all!!!!

Anonymous said...

wow - wonder what the bond market will think of that. defaultorama.

Doug said...

Hmm, low rates and loose lending got us into this mess.

I know - we can fix it by even lower rates and even looser lending!

Anonymous said...

the picture says it all. we deserve a bond market dislocation for this idiocy.

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