As I read through daily mortgage news and commentaries, I frequently run across information about eased credit guidelines with Freddie Mac and Fannie Mae. Most recently Fannie Mae updated their guidelines for self-employed borrowers. They have relaxed documentation requirements and analysis of business and personal income.
Speaking of self-employed borrowers. It is often very hard for a small business owner to qualify for a mortgage loan because business tax returns often show very little income on the adjusted gross income bottom line. There might be some help for business owners. Help … but somewhat controversial. What I mean by is that some lenders across the nation are offering stated income loans again. These were often called NINA loans or liar loans. They were called liar loans because borrowers were stating income they thought would allow them to qualify. A borrower states to the lender what their monthly income is with very little or no documentation required.
These loans are referred to as non – qualified loans and are not sold to the secondary market, i.e. Freddie Mac or Fannie Mae. These type of loans may also require a certain downpayment or cash reserves.
This is feared by some as a reason or a least one of the reasons that caused the mortgage melt down.
What do you think? Are we heading back to what hit the mortgage business in the past by offering stated income loans?
Did you know what site is the only federally approved site to obtain a free consumer credit report? Annualcreditreport.com is the only official site directed by federal law to provide them.
Federal law to provide them
The three national credit reporting agencies, Equifax, TransUnion, and Experian, have launched the National Consumer Assistance Plan initiative which will help make credit reports more accurate, transparent, and understandable.
NewsNews ReleaseJUNE 09, 2016
Equifax, Experian and TransUnion today launched a new website, http://NationalConsumerAssistancePlan.com, to inform and update consumers about implementation of the National Consumer Assistance Plan, an initiative launched by the three companies in March, 2015 to enhance their ability to make credit reports more accurate and make it easier for consumers to correct any errors on their credit reports.
Are you considering renting out your home? There are some considerations you should think about. Read more:
This is a really good blog post from Freddie Mac. It is good information for Realtors and mortgage lenders to share with their clients. Check it out.
Listen or read any show or article on millennials and the home buying process and you'll likely hear the phrase "high student loan debt." It has been hampering potential home buyers from being able to stay under the debt to income ratio threshold.
Recently both Freddie and Fannie Mae have revised their guidelines which may open up the possibility of home-ownership for many Americans. The key is if you have a student loan payment plan (often referred to income based repayment) that payment can be used instead of what is listed on your credit report.
If you have been turned down for a loan because of high debt to income ratios go back to your lender and ask them to recalculate your DTI (debt to income) ratio using the payment from your repayment plan.
In L.A. Times, Nichols Emphasizes Urgency of Regulatory Reform
Posted: 30 May 2017 06:07 AM PDT
Banks of all sizes need regulatory reform, and the need is especially pressing for community banks, ABA President and CEO Rob Nichols wrote in a Los Angeles Times op-ed. With the House expected to vote on a regulatory relief bill as early as next week, the op-ed drives home the message that excessive regulatory burdens negatively affect bank customers.
Nichols recounted a story from a southern California community bank that had to end mortgage lending because the software required to stay compliant would have meant the bank lost money on every loan. He wrote:
Nearly a decade after the crisis, we’ve ended up with too many duplicative and sometimes contradictory rules that don’t always promote safety and soundness, and may actually hinder banks from serving their customers and growing local economies.
Mortgage Interest rates continue to decline. Events in Washington are key factors.