Comments on: Fannie Mae/Freddie Mac Put the Noose Around Investors’ Necks with New Lending & Underwriting Policy Changes

By: Jeff Brown

Jeff Brown — Sat, 25 Sep 2010 17:23:25 +0000

John — Not without committing fraud. They even bar you if the purchase is for a second home or so-called ‘vacation’ home. I understand their reasoning though. Owner occupants historically are more ‘invested’ in keeping the property, etc.

There are simply not enough buyer-users to take care of their inventory, so the 15 day look will not be that big of a deal. Of course, from your viewpoint, the best deals in the best locations are probably most at risk for those allowed to buy them before you get a chance. What a pain.

By: John Law

John Law — Sat, 25 Sep 2010 14:43:40 +0000

Can anyone tell me a way around this 15 day first look on freddie mac properties for investors? It seems as though the more the government gets there hands involved in the free enterprise system, the longer it takes for the system to work its way out of this mess.

By: miko

miko — Mon, 29 Mar 2010 19:47:17 +0000

Since we all read this post you forgot to mention,investers like me . Ive owned 4 rental property’s and my arms are up in about 9months and i’ve been applying to refinance and am denied because i have 4 with freddie mac and the homes are slightly under water and when i bought them , i put down 20%, so they made some good rules at the end of 08′Sad thing there rented and i have good credit. So 4 more houses on there way, the banks will be owning more and more property’s . I have a lot more to say, but we all know the bottom is not anywhere in sight……

By: Ted Akers

Ted Akers — Sun, 03 Jan 2010 17:35:12 +0000

Bawld Guy is spot on. Both agencies took huge losses on investor deals, but I would love to see their detailed breakdown of those portfolio losses. Good credit used to get up to 100% financing on N/O/O, and for awhile even with Stated Income. So, my estimate is that the majority of the defaults were deals with little to no skin in the game and from new investors that purchased multiple properties and many based on Stated Income loans. If one or two of those went vacant the Stated Income qualifier was in trouble and without skin in the game it became easy to walk. The pendulum has swung too far now. Not allowing rental income to qualify without a two year history even with higher credit requirements, higher down payments, and full documentation loans only is way out there in left field – I say upper left deck out of bounds.

By: BawldGuy Talking

BawldGuy Talking — Fri, 01 Jan 2010 23:45:58 +0000

Bill — You make some excellent points. But tell me, when investors put almost $60K skin in the game on a $250K property, and the rest of their credit history passes muster, don’t you think they’ll ‘figure’ a way to protect all that ‘skin’?

Also, an experienced investor with some props less than a couple years in their portfolio makes them a bad risk? I think that’s where the pendulum appears to have swung too far. If I’m a lender, and an investor with a dozen cash flowing properties is puttin’ 25-30% down + closing, with a score of over 720 with abundant reserves, he gets the dang loan.
.-= BawldGuy Talking´s last blog ..Munchin’ On The Numbers =-.

By: Bill "Financexaminer"

Bill "Financexaminer" — Fri, 01 Jan 2010 20:09:47 +0000

Hi, I think that if you look at the majority of defaulted investor loans you’ll find that they will fall within the guidelines that are used to exclude new applicants. Having experience, I assume, will be viewed in the same light as those who apply for conventional financing and have recently changed jobs or professions. Being in a job for less than three years is acceptable when the applicant has experience in that line of work. If an investor applicant has had experience in real estate management and has recently begun investing for their own portfolio, they may be blessed. As to who get’s the listings, I’d venture to say that it is political as much as it is based on professional abilities, no….That it’s based more political connections than the ability to move a property! Bill

By: BawldGuy Talking

BawldGuy Talking — Fri, 01 Jan 2010 02:01:38 +0000

Giovanna — I haven’t a clue how Fannie chooses their agents. Suffice to say your problems find their root in a gov’t controlled process. ‘Nuff said.

Happy New Year!
.-= BawldGuy Talking´s last blog ..Munchin’ On The Numbers =-.

By: Giovanna Mandel

Giovanna Mandel — Thu, 31 Dec 2009 19:58:26 +0000

Answer me this if you can….who picks the real estate agents that Fannie Mae gives their homes to?? Who decides the pricing of said houses? While trying to negotiate a second home in AZ recently the agent had the house listed on MLS for $160,000. Same house on the HomePath website showed $149,900. We originally offered 153,000 with 20% down on the house and they countered with 156,000. The agent hardly ever returned phone calls or emails to our agent. Now the house is under contract with another buyer. I’d love to know what he got for the house.

Can the agaents ask whatever they like even though Fannie Mae is listing for $11,000 less?

By: BawldGuy Talking

BawldGuy Talking — Tue, 15 Dec 2009 20:44:25 +0000

Dana — It’s my contention they’ve been a major player in the current scenario, from beginning to end. But then I suspect you do too.

There shouldn’t even be a Fannie or a Freddie.
.-= BawldGuy Talking´s last blog ..Monday’s Update – Munchin’ On The Numbers =-.

By: Dana Matonis

Dana Matonis — Tue, 15 Dec 2009 19:09:18 +0000

Jeff,

Great post ! Freddie and Fannie have almost destroyed the residential housing market with their HVCC, AMC’s fiasco and now apparently they want to strangle the Income and investment market as well ! It is truly the fox guarding the henhouse – but in all fairness they didn’t have anything to do with the housing bubble bursting – or did they ?

By: andre

andre — Tue, 15 Dec 2009 05:48:18 +0000

does that mean we could’nt refi with a smaller bank or credit union…?

By: Ted Akers

Ted Akers — Mon, 14 Dec 2009 00:59:35 +0000

Jeff,
Very good and accurate post. Many foreclosures on investment properties are driving these changes; but the majority of those foreclosures were likely high LTV, often stated income, and with mortgage products such as option ARM’s – all products which were created on wall street. Foreclosures absorbed by FNMA and Freddie were primarily high LTV deals. Historically lenders have recovered just above 80% on foreclosures. That number is probably high in this market, BUT the 20% down with higher credit requirements and ONLY full documentation loans sure seems like a safe risk. It is obnoxious and ridiculous to disallow rental income for properties owned less than two years. We all understand both agencies have suffered significant losses, BUT well qualified Full Documentation investors are a source to absorb overflowing inventory. Anyone who has the ear of a congresssman or senator should firmly bend those ears, letting them know that these changes are serious over reactions and are impeding the housing recovery by removing legitimate qualified buyers. STUPID