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Mango

SoWal Insider
Apr 7, 2006
9,709
1,360
New York/ Santa Rosa Beach
Mango,

I know Fannie is pretty much in the toilet at this point, but what's your take on this story? <see highlighted areas>:

HOUSING: Fannie Mae cracking down on 'walk aways'
New guidelines make it more difficult to purchase a second home.



Fannie Mae's new guidelines require borrowers looking to purchase a second home to have at least 30 percent equity in the original residence, or plenty of cash reserves.

Though real estate agents and mortgage brokers said the new policies are directed at walk aways, Fannie Mae issued a statement Tuesday that the guidelines were not in response to borrowers allowing their homes to fall into foreclosure.


Beyond the new requirements for borrowers purchasing second homes, the new guidelines also require homeowners who have received a notice of default ---- the first step of the foreclosure process ---- to wait two years before qualifying for another mortgage. It also extends the time homeowners with a foreclosure must wait before qualifying for a Fannie Mae mortgage.

http://www.nctimes.com/articles/2008/07/09/business/z58e88855c362c47a882574800077e45c.txt

Fannie's stock is in the crapper, but Fannie Mae, IMO, is not going anywhere.

Not sure what you mean by my take, and there was another thread where I voiced my opinion about the walk aways and the new guidelines. I stated I agreed with the new guidelines in place. It's just common sense underwriting. The previous loopholes allowing a lease only without justifying the value of the home now being claimed to be an investment property. They needed to sew that up in writing. Although, any good underwriter would have stipulated for an appraisal to verify equity, 30% needed to be in writing.

FYI: just because FNMA states it takes place for apps August 1 and after, believe me, most Banks, if not all, will be implementing this now.

The statement issued by FNMA is nothing nefarious. It's true, they are not targeting borrowers in foreclosure. As a matter of fact, I feel they are slightly lax actually. They will allow someone who does a short sale to buy a new home within only two years. Same for Chapter 13 discharges.

The guidelines are pretty much the same as they were before regarding BK's other than 13's and foreclosures. It was 4 yrs before, now it's 5. Exceptions can be made by the underwriter based on extenuating circumstances like death of primary wage earner or illness for BK's other than 13 . Same can be for deed in lieu of foreclosure. The u/wer can except to 2 years for the above.

The other caveat added was that after a foreclosure, after the 5 year period, between 5-7 years, the FICO must be a minimum of 680, and the Borrower must put 10% down.

I do not think any of the new guides are unreasonable. Matter of fact, I could have wrote them myself. ;-)

(Except I would have added that any investor who did a short sale, who bought in the last 2 years, HAS to get a good licking by their neighbors)






 

SHELLY

SoWal Insider
Jun 13, 2005
5,770
802
Not sure what you mean by my take, and there was another thread where I voiced my opinion about the walk aways and the new guidelines.


In regards to the statement: "Fannie Mae's new guidelines require borrowers looking to purchase a second home to have at least 30 percent equity in the original residence, or plenty of cash reserves."

In the event that a buyer of a second home does not have "plenty of cash reserves," are they requiring some purchasers to have an appraisal on their primary to determine they indeed have over 30% equity? (Meaning those who have a "hit the number" bubble-era appraisal.)
.
 

Mango

SoWal Insider
Apr 7, 2006
9,709
1,360
New York/ Santa Rosa Beach
In regards to the statement: "Fannie Mae's new guidelines require borrowers looking to purchase a second home to have at least 30 percent equity in the original residence, or plenty of cash reserves."

In the event that a buyer of a second home does not have "plenty of cash reserves," are they requiring some purchasers to have an appraisal on their primary to determine they indeed have over 30% equity? (Meaning those who have a "hit the number" bubble-era appraisal.)
.

Check out page 6 of the guidelines.

Conversion to a Second Home
? Both the current and the proposed mortgage payments must be used to qualify the borrower for the new transaction; and
? 6 months of PITI for both properties is required to be in reserves. Lender may consider reduced reserves of no less than 2 months for both properties if there is documented equity of at least 30 percent in the existing property (derived from an appraisal, automated valuation model (AVM), or Broker Price Opinion (BPO), minus outstanding liens)

( I have to get more info about the BPO, because I have never heard of this ever being accepted) :blink:
 

SHELLY

SoWal Insider
Jun 13, 2005
5,770
802
Check out page 6 of the guidelines.

Conversion to a Second Home
? Both the current and the proposed mortgage payments must be used to qualify the borrower for the new transaction; and
? 6 months of PITI for both properties is required to be in reserves. Lender may consider reduced reserves of no less than 2 months for both properties if there is documented equity of at least 30 percent in the existing property (derived from an appraisal, automated valuation model (AVM), or Broker Price Opinion (BPO), minus outstanding liens)

( I have to get more info about the BPO, because I have never heard of this ever being accepted) :blink:

Thanks.

...those guidelines would put a hitch in investulators' giddy-ups.

.
 

Pirate

Beach Fanatic
Jan 2, 2006
331
29
In regards to the statement: "Fannie Mae's new guidelines require borrowers looking to purchase a second home to have at least 30 percent equity in the original residence, or plenty of cash reserves."

In the event that a buyer of a second home does not have "plenty of cash reserves," are they requiring some purchasers to have an appraisal on their primary to determine they indeed have over 30% equity? (Meaning those who have a "hit the number" bubble-era appraisal.)
.

Fannie has no business writing mortgages on second homes... period.
 

chickenlittle

Beach Comber
Jun 11, 2008
36
0
possible rental?

I saw you had a property in south haven would they consider letting anyone rent it instead of buying?
 

TheSheep

Beach Fanatic
Jan 30, 2007
360
27
Farms
tinyurl.com
( I have to get more info about the BPO, because I have never heard of this ever being accepted) :blink:
It's a comp to someone with whm a Broker believes he will do business with or is a Client. No fees attached.
 
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