Fannie Mae changes help some, hurt some borrowers.

29 11 2010

Fannie Mae’s new lending guidelines, which will take effect Dec. 13, will make getting a mortgage easier for some borrowers and more difficult for others.


Easier:
These new rules will allow buyers to use gifts and grants from nonprofit groups for their minimum 5 percent down payment. Freddie Mac is also considering similar new guidelines, according to spokesman Brad German. Borrowers previously were required to contribute a minimum 5 percent down payment from their own funds, with additional down payment money permitted from a gift.

Harder:
At the same time, debt-to-income ratios will be lowered from 55% to 45% maximum.  Fannie Mae is also increasing its scrutiny of payment histories on revolving debt, and buyers who have missed a payment will have 5 percent of the total balance added to their ratios.

Borrowers who have gone through foreclosure will be excluded from obtaining a Fannie-backed loan for seven years, an increase from the previous limit of four years.

What do you think about the new changes?  Are they needed?  Or are they hurting borrowers and the economy?

For the full NYTimes article please click HERE.





Cash is King

8 11 2010

Did you know that cash was the #1 financing type for real estate purchases in September?  This was the first time in the history of the Campbell/IMF survey that cash buyers were the largest group of buyers in the market. 

Why did this happen, and how does it affect you?

Cash is king now for two reasons: getting financing for distressed properties is tough, and there are less first-time homebuyers in the market now. 

Many of the “best deals” on distressed properties (ie. the ugliest homes) go to cash buyers, who can close quickly and not have to worry about negotiating and completing financing-required repairs.  Let’s face it, banks are in the business of lending money.  They don’t want to spend money to repair properties that are not currently bringing in money.

And secondly, since the tax credit expired, the number of first time homebuyers has fallen. 

This is a huge paradigm shift in how we in America view debt– rates are at their lowest ever, but the most active group of buyers are using cash. 

How do you think this will affect you when you plan to sell? 

For the full article from HSH, click HERE.





Sports, Schools, and now Housing—go Oklahoma!

1 11 2010

 

Oklahoma just keeps getting better.  We have an NBA basketball team, the best bedlam football rivalry around, and now we’re topping the lists on best housing markets. 

Forbes just announced Oklahoma City the #5 fastest-growing city and #11 in the best big cities for jobs.  A KPMG study named it the least costly metro area to do business among U.S. cities with populations between 1 million and 2 million, and according to the Census Bureau Community Survey, it has the third-shortest commute time among the 52 largest cities. Such factors–plus its exciting new basketball star, Kevin Durant–have definitely attracted plenty of new residents. An article in the Sacramento Bee reported that many Californians were migrating to the former Dust Bowl town in search of jobs and more stable housing prices, and its population, at 1.2 million, is expected to grow 9.8% in the next 10 years, according to the Greater Oklahoma City Partnership.  Click HERE for the full Forbes story.       

Thanks to good jobs and low cost of living, the

Oklahoma City metro area ranks as America’s Most Affordable City.” 

-Forbes Oct 28th, 2010

 

Another Forbes article, released a few days ago, lists OKC as the most affordable city in the US.  It’s a great article; please click HERE to read it. 

So keep it up, Oklahoma.  And I’ll cheer with you at the games.