09 Feb 09 Fannie Mae Brings Back Required Counseling
With mortgage interest rates this low, organizations like Fannie Mae want to extend the opportunity to potential homeowners who are considering purchasing a new home. In the last 2 years, FHA home loans have been the only mortgage available for first time homebuyers with a competitive interest rate.
Fannie Mae has reinstated a mandatory homeownership counseling and education requirement for first-time homebuyers interested in qualifying for its MyCommunity Mortgage loan or nontraditional credit profile customers applying for any other mortgage loan type. The goal, Fannie said, is to help borrowers “better assess their options and responsibilities both before and after they purchase a home.” For borrowers purchasing a two- to four-unit property under the MyCommunity Mortgage product, Fannie will require pre-purchase education and counseling and landlord counseling through its “Becoming a Landlord” curriculum, or other programs with a similar content.
Service for borrowers must be provided in compliance with the national industry standards for homeownership education and counseling developed by a national advisory council of industry stakeholders including Fannie Mae, launched by the NeighborWorks Center for Homeownership Education and Counseling. “In this extraordinary market, we think it is critical to reinstate this requirement and to work with counseling agencies and our lender partners to help homeowners succeed,” said Fannie Mae president and chief executive officer Herb Allison, in a company release. “High-quality counseling provides the first-time homebuyer in particular with reliable information and the resources necessary to make the kind of informed decisions that ultimately lead to sustainable homeownership.”
The effort is part of Fannie’s longstanding strategy that promotes the development of mortgage industry standards to ensure persistent quality before and after homebuying education in partnership with some of the country’s main agencies such as the National Foundation for Credit Counseling, Consumer Credit Counseling Service of Greater Atlanta and Mission of Peace, a Flint, Mich., faith-based nonprofit, along with lender counseling services offered by large banks, including CitiMortgage and Wells Fargo Home Mortgage.
Sanjiv Das, CEO of CitiMortgage, another partner to the program, has also committed a lot of resources to counseling through its decade-long $200 million global commitment to financial education. “Any person who receives pre-purchase housing counseling understands the financial obligations involved in homeownership and learns how to budget their income to pay for all these obligations,” said CCCS vice president of counseling, Michelle Jones. Read the complete article >
Tags: Fannie Mae, FHA home loans, MyCommunity
