DALLAS — Fannie Mae Senior Risk Manager Nathan Myres told credit union mortgage officials listening to a Webinar sponsored by CU Members Mortgage here yesterday that Fannie Mae was reasserting an older policy on restricting maximum loan-to-value ratios in declining markets.
Policy 07-22 restricts the maximum loan-to-value ratio and combined loan-to-value ratios for property in declining real estate markets across the country to 5 percentage points less than the maximum permitted for the selected mortgage product, said Myres.
With home price growth down 3.1% nationally and much steeper declines in certain geographic spots (California –6.7%, Florida, -4.5% and Nevada –11.6%) Myres said, "We are feeling the crunch but trying to react in a prudent manner; one that is right for our clients and for our investors."
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With 5% of all single family homes in the country available for sale, something Myres called "unprecedented," Fannie wants its lenders to make full use of all supplemental sources of home valuations possible to assess trends and assure that appraisals are on target.
"This is a return to basics," said Myres. "Where Desktop Underwriter checks certification, fine, but also assess the collateral values and credit–essentially the whole situation of the borrower."
Details in the next edition of Credit Union Times.
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