Pipeline: GSEs

Submitted by Ronald Tennant with Metrocities Mortgage:

American Banker (05/22/08) P. 13; Colter, Allison Bisbey
Freddie Mac has announced that it is following Fannie Mae's lead in eliminating a policy mandating higher down payments in housing markets experiencing declines. As of July 1, lenders will not be required to reduce the maximum loan-to-value (LTV) under 95 percent in declining markets, regardless of whether manual underwriting or Freddie Mac's automated underwriting system is used. Instead, occupancy and transaction type and the number of units will determine maximum LTV. Low- and moderate-income borrowers in these markets will continue to have access to 100 percent mortgages through Freddie Mac's Home Possible program. Fannie Mae's new policy, announced on May 16, dictates that, beginning on June 1, the maximum LTV will be 97 percent for loans underwritten using automated software or 95 percent for those underwritten manually.