One of the problems with lack of transparency, is that people…errr…don’t know what you are thinking. Just like the fact that I have been weak in my quantity of postings as of late. I can’t explain it, because, well, I got tired of being, uhhhh…transparent. Needless to say, I am again transparent, and even more superficial.
One of the rumors floating around the appraisal/mortgage world for the past few weeks, covers the topic of Fannie Mae’s restriction on loans in markets they designate as declining. It was even suggested that a restriction in one market versus another, suggests redlining . However, I don’t see that correlation.
but i digress…
In a market that is declining, Fannie Mae will have a 5% higher loan to value ratio so instead of requiring 20% down, it might be 25% if the local market is declining . So markets with average mortgage amounts below the $417,000 conforming limit, this could have quite an impact.
>Current home price trends indicate that home values continue to decline in many markets across the country. As a result, and based on our continued monitoring of loan performance, Fannie Mae is reinstating a policy to restrict the maximum loan-to-value (LTV)  ratio and combined loan-to-value (CLTV) ratio for properties located within a declining market to five percentage points less than the maximum permitted for the selected mortgage product.
Notice the use of the word reinstating. This is a recurring theme in mortgage lending these days. Its not the introduction of new lending guidelines, its simply the enforcement of existing guidelines.
In theory, the appraiser gets to lead the way in determining declining markets (in sarcastic tone: shocking!, amazing!, incredible!)
>Fannie Mae strongly encourages lenders to use supplemental sources and tools to independently assess current housing trends, unless the appraisal indicates that the subject property is located within a declining market. When the appraisal notes that the subject property is in a declining market, the maximum financing policy must be applied. When the appraisal does not indicate that the subject property is located within a declining market, Fannie Mae strongly urges lenders to implement processes and apply supplemental sources and tools to validate current housing trends and not rely solely on the information reflected in the appraisal.
But the appraisal industry has been neutered so severely by the mortgage brokerage and mortgage lending industry with pressure to “play ball” that I am not confident the appraisal industry is able to have this responsibility in the first place until proper regulatory restrictions protecting appraisers are in place. No more than a small percentage (you know who you are) of appraisers would be brave enough to show a negative time adjustment for fear of losing a client. I hope recent enforcement actions by the NY Attorney General and the SEC  will make a difference.
Still, its a prudent and thoughtful first step for Fannie Mae to take. One of the things that drove me crazy in prior periods of market decline, lenders would send out policy notices saying they would not allow negative time adjustments. We would argue back, saying that this was an underwriting issue and it was simply a matter of adjusting the loan to value ratio, not to mandate rose colored glasses and ear plugs for the eyes and ears of the lenders. We either dropped them as a client or they changed their mind.
The byproduct of this action in declining markets will likely be even lower sales volume via stricter credit, placing more price stress in already distressed markets.
I can’t help but see the irony here: the reduction of Fannie Mae’s loan to value criteria in declining markets could actually lead to more foreclosure volume and more exposure for lender’s collateral. But in the long run, its a prudent action.
This restriction in declining markets should never have been lifted in the first place. It is better for the stability of the lending system by re-introducing the concept of risk awareness to lending decisions.
Now thats a concept I think we can risk having.
mp3  mp3 download  buy mp3  download mp3  download mp3 online  free download mp3  buy music  buy music online  buy mp3 music  mp3 music map  mp3 music map  movie  movie theater  movie download  dvd movie rental  adult movie  free porn movie  epic movie  movie showtimes  free sex movie  movie trailer  free movie downloads  porn movie  free movie  dans movie  movie review  transformer movie  yahoo movie  movie listing  xxx movie  new movie  free adult movie  britney spears video  myspace music video  daddy video  video of saddams execution  amateur video  video youtube  video download  free lesbian video  video daniela cicarelli  hanging live saddam video  clip  clip video  clip free sex  clip free porn  clip free sex video  clip funny video  clip mini  clip great  clip porn  clip free video  clip sex  clip youtube  clip sexy  clip sexy video  clip deviant  clip funny  clip movie  clip free movie  clip utube video  clip sex video  clip free porn video  clip free movie porn  art clip image  art clip valentine  big booty clip  clip game mini  clip porn video  clip free  clip sound  clip movie porn  clip xxx  clip earring  clip free video xxx  clip paper  art clip dover  clip lesbian  clip gay  movie gallery  free xxx movie  watch movie online  new movie release  scary movie  celebrity movie archive  lesbian movie  disney movie  gonzo movie  upcoming movie  watch free movie online  movie rental  amc movie theater  gay movie  free online movie  psp movie  movie soundtrack  transformer the movie trailer  movie phone  free big movie  horror movie  free gay movie  harry potter movie  movie cinema