On March 12th Fannie Mae announced further loan level pricing adjustments ON TOP OF the loan level price adjustments that went into effect on March 1st of this year. Basically, the new LLPA’s mean that, if your credit score is below 720, you are going to be paying a higher rate than if your credit score is over 720.
Listen, I don’t claim to be a smart man but this new stuff WILL NOT FIX OUR PROBLEMS! This is a total overcorrection of the floodgate lending that has been going on the past few years. Our goal should be to put GOOD credit borrowers into the glut of houses that are available. We don’t want to make it TOO easy but for goodness sakes we don’t want to make it overly restrictive either! We need to stop trying to nickel and dime good borrowers. If you would have told me that I would have a hard time with a 700+ borrower putting money down and fully documenting his income I would have told you that you were crazy but that is what I see happening.
My only hope is that these new restrictions, along with the new guidelines for Mortgage Insurance, don’t squeeze an already slow market even further.
Craig Pollard is a mortgage professional and owner of Texas Mortgage Team. He specializes in the Dallas Fort Worth area and is a frequent voice on Texas Home Central’s blog. Craig can be reached at 972-317-9900 or emailed by clicking here.
Tags: Fannie Mae, Mortgage Market
This entry was posted on Thursday, March 13th, 2008 at 8:02 am and is filed under Housing Market, Money Matters, Mortgage. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.