"New rules on condo loans hindering some buyers" by Jenifer B. McKim, Globe Staff | May 23, 2009
Condominiums are becoming more difficult to purchase and refinance as lenders increase fees and tighten regulations to offset what they say is the higher risk of lending to buyers of condos as compared with buyers of single-family homes.
Where did all those trillions go, huh, America?
The changes are part of an effort by mortgage giants Fannie Mae and Freddie Mac to limit risky lending in a segment of the housing market particularly hard hit by foreclosures in recent years.
Related: One Final Fannie F*** From the Boston Globe
The Killing and Cover-Up of David Kellerman
FLASHBACK:
"Fannie Mae taps insider for helm; Williams, operating chief since '05, faced with challenge of turnaround" by Dawn Kopecki, Bloomberg News | April 21, 2009
WASHINGTON - Fannie Mae tapped chief operating officer Michael Williams to replace Herb Allison as chief executive officer of the mortgage finance company....
Allison was nominated by President Obama to run the Treasury office that oversees the $700 billion Troubled Asset Relief Program for banks.....
Fannie and its rival, Freddie Mac, together own or guarantee 56 percent of all US home loans. The two reported combined net losses of $109 billion for 2008 as mortgage delinquencies rose. The government seized the companies after examiners determined that their losses would further disrupt the housing market. Fannie has tapped $15.2 billion in emergency preferred stock investments from the Treasury. Freddie has taken $44.6 billion.
Fannie and Freddie paid $50.8 million in bonuses to retain key personnel last year and an additional $159.4 million will be awarded this year and next. Williams is getting the biggest payout at Fannie, $1.3 million, in four installments through early next year, according to Fannie's annual report to the Securities and Exchange Commission. --more--"
Back to the present piece of s***....
In addition to paying higher fees to get a loan, prospective buyers now must make down payments of up to 20 percent because companies that traditionally insure lenders against borrowers who default are shying away from condos....
The National Association of Realtors is lobbying Fannie Mae and Freddie Mac, which are controlled by the federal government, to have the rules relaxed.
Hence the looting.
"A person with good credit and qualifying income ratios, why is that person being additionally harmed because that person wishes to buy a condo property?" said Lawrence Yun, chief economist for the trade group. "If the buyers are hindered from entering the market, it will deter the housing market recovery."
I think that's the point (see above post).
Fannie Mae and Freddie Mac's guidelines, which vary slightly, affect much of the mortgage lending in the United States because the agencies end up buying or guaranteeing nearly 60 percent of all loans, according to federal data. Private lenders do not need to adhere to the new regulations, but those interested in later selling mortgages to the two federal agencies must abide by them.
One of the Fannie Mae and Freddie Mac lending changes is a surcharge equal to three quarters of a percent of the amount being borrowed. The agencies say the surcharge - which took effect April 1 - translates into about an eighth of a percentage point increase in an interest rate, although it could be higher depending on the borrower's credit rating and other financial details. To avoid the extra cost, anyone buying or refinancing a condo must provide a down payment of 25 percent, or demonstrate that they have equity of at least 25 percent in the property.
Brad German, a spokesman for Freddie Mac, said the point fee is meant to address the added risk of financing condos. "The market has deteriorated, and the condominium market has become much riskier," German said. "We have adjusted our fees accordingly."
Both agencies also now will only loan to people buying into new developments where 70 percent of the units are already sold - or under contract - to owners who will live there, not those buying properties as investments.
So the housing market is more about INVESTORS than YOU OWNING YOUR OWN HOME!!! The shit propaganda goes down hard sometimes, doesn't it, 'murkn?
Until recently, only 51 percent of units had to be owner occupied. The agencies say the intent is to make sure projects are financially sound. But the change has left some otherwise qualified buyers unable to close loans and caused developers to consider turning condos into rental units.
I think that's the point (see above post).
Developers say the occupancy minimum, combined with stricter lending regulations, is driving away business and keeping them from completing projects. At the Residences at Atlantis Marina, a new luxury condo complex on the waterfront in Winthrop, several buyers poised to close on new homes earlier this year found they could not get financing because of the new requirements....
Adding to headaches, homeowners who can't come up with a 20 percent down payment have traditionally been required to pay for private mortgage insurance, which protects lenders against loan defaults. But many private mortgage insurers now refuse to cover condos or are asking for down payments of 10 or 15 percent before they will issue a policy.
The changes have pushed some prospective buyers to consider single-family houses rather than deal with the complications of condo financing, said Mark O'Hagan, owner of the real estate company MCO and Associates Inc., in Harvard. "Welcome to a brave new world," O'Hagan said of the tougher lending stipulations....
Where is YOUR BAILOUT, American?
