Loans Increasingly More Difficult to Obtain

Yes, lots of mortgage money is available. However, for many, the requirements to access this available money is still getting more stringent. FannieMae (FNMA) announced earlier this week that they were Increasing the 'Declining Market Delivery Fee' to .5% as of October 1st (which will of course be passed onto the consumer in the form of Higher closing costs or Increased interest rate).

Also, another trend is 'Credit-Scoring' the interest rate. Although this has been the case for quite some time, the Secondary Market is now looking at slicing the rate into far more credit score tiers.

I don't disagree with the rational of all of this, however, for anyone lookig to buy in the near future (that does not have a very high credit score) should not try to time the bottom of the market because it could really end up costing you more in the end.

Can It Get Any Worse?

Residential sales are off of last years pace in units And the average (and median) sale prices are falling as well (not as much as units, thankfully). And we all know that mortgage financing has become harder to obtain as of late.

So... Just when it was looking pretty bad out there, Fannie and Freddie may now need to be bailed out by good old Uncle Sam (read: You and I who Pay Taxes). Does anyone remember what the Mortgage Market looked like BEFORE 'The Secondary Market' (Fannie & Freddie)? Let me refresh your memory: 20% down, 16% to even 21% mortgage rates, and a lack of available mortgage money Even If you had 20% down And was WILLING to pay 18% +/-. Not to mention that borrowers actually needed to have money, a stable job, some savings, reasonable debt (all novel concepts, no)?

Why am I telling you this? Because if you have the desire to own a house anytime in the near future, NOW may very well be The Best Time to Buy. Oh, and if you are looking to sell, PLEASE price it right - or wish that you did.

Fannie Mae (FNMA) Takes Away Declining Market Penalty

On May 16th, 2008 FNMA (otherwise know as Fannie Mae) has repealed the reqirement that borrowers in 'Declining Markets' put an Additional 5% down payment on top of the typical down payment required for the program Effective June 1st, 2008. This is GREAT NEWS for Worcester Country, MA which was declared by FNMA as a declining market (FNMA's definition of a declining market is 2 consecutive quarters showing 1% or more decline in value).

This provision was pretty unreasonable given the current climate and has further aided in the slowdown in the market in 'declining markets'. In addition, FHA Lons have gained in popularity over the past few months due to low downpayment requirements and the realative ease of qualifying borrowers (especially first time borrowers) - In essence FHA was eating Fannie's lunch!

More lending opportunities can only help this market which still is ripe with opportunity.

Could it be that 'common sense' is now starting to prevail in the mortgage lending markets?

What do you think?