As the mortgage industry continues to tighten credit standards, once popular loan programs (Stated Income, Jumbo Loans, Combo loans) are being revised or discontinued.
The latest casualty is the zero down payment sector. Responding to nationwide studies suggesting that equity levels are strong indicators of borrower default risk (Consumers with little or no equity are most likely to "walk away" from their loan), mortgage insurers have discontinued coverage above 97%. The widely known and often used My Community and Home Possible programs from Fannie Mae and Freddie Mac, once the dominant loan programs for borrowers with no down payment, now require 3% down payment and have credit score miniums. Other loan programs once allowing for 100% financing have followed suit, since mortgage insurance is no longer available either, to alleviate the higher risk of borrorwers with no down payment.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment