Lenders, Insurers More Cautious

Holden Lewis writes:

In recent weeks, mortgages quietly became harder to get.

Mortgage insurers require higher credit scores and bigger down payments than they did a month or two ago. It helps to have a high credit score.

Bob Moulton, president of Americana Mortgage of Manhasset, N.Y., has a client who wanted a jumbo, interest-only mortgage. Moulton tried to get the client a loan through Astoria Federal Savings, which required a credit score of 740. Mortgage giants Fannie Mae and Freddie Mac, which set guidelines for standardized mortgages, announced that they would enforce a "declining markets" policy, which requires higher down payments for loans where house prices are falling.

Borrowers and lenders complained that the policy was scuttling deals. A Fannie spokeswoman explained that the company could ditch the declining-market policy because the new loan software "will limit risk layering and assess each loan more precisely."

Because of Fannie’s stricter standards, conforming lenders will require credit scores of at least 580. 

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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