20 Apr 09 New Mortgage Industry Policy Affects Consumers
Mortgage interest rates and house prices are down which sounds great for buyers and refinancers. But mortgage lending underwriters and appraisal changes taking effect this month are putting new hurdles in the way of borrowers and loan officers.
Take Fannie Mae’s and Freddie Mac’s add-on fees for mortgage loans purchased after April 1st. In some cases, applicants are being hit with extra fees of 3percent to 5percent because of the type of property they want to purchase a home or refinance their mortgage, their credit scores or the size of their down payment.
Some major mortgage lenders who sell loans to Fannie and Freddie are going further tightening underwriting rules beyond what either corporation requires. For example, as of April 6, Wells Fargo, one of the country’s largest mortgage originators, imposed a new minimum FICO credit score of 720 up from the previous 620 on all conventional loans purchased through its wholesale system that have less than a 20 percent down payment. It also began requiring a total debt-to-income ratio maximum of 41 percent down from the previous 45 percent. Read the complete article>
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