Freddie Mac Eases Declining Markets Policy On May 2, 2008, Freddie Mac announced changes that ease the impact of its declining markets policy. As a general rule, under this policy, if a property is located in a declining market, the maximum loan-to-value ratio (LTV) is reduced by 5 percentage points. Under the revised policy, for mortgages with maximum LTVs equal to or more than 95%, lenders are not required to reduce the maximum LTV ratio below 95% if the following requirements are met:
The mortgage is used to purchase the home or for a "no cash out" refi.
The mortgage is secured by a one unit residence (not a 2-4 unit residence or a manufactured home).
The mortgage application receives an "Accept Risk Class" from Freddie's automated underwriting software, Loan Prospector. Freddie is also allowing additional costs to be included in refinancings of Freddie-owned or -securitized mortgages that have already been exempt from the declining markets policy. The announcement also reminds affected parties that the following types of mortgages are exempt from the declining markets policy: FHA/VA, section 184 Native American, and section 502 rural housing mortgages.Fredde Mac BulletinJeff Lischer 202-383-1117, Marcia Salkin 202-383-1092
Boca Raton Real Estate
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment