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Fannie Mae Changes Down Payment Requirements
Kerri Panchuk | 05.16.08
Government-sponsored enterprise (GSE) Fannie Mae said Friday that the company is changing its national down payment policy—a measure that will allow them to “accept up to 97-percent loan-to-value ratios for conventional, conforming mortgages processed through its Desktop Underwriter (DU) automated underwriting system.”

In addition, when it comes to loans written outside the Desktop Underwriter system, Fannie is now able to accept 95-percent loan-to-value ratios.

These changes reverse a policy created eleven years ago at Fannie that required higher down payments in markets with falling home prices.

WHAT are they thinking here? There are no investment backs to sell the loans to! In many declining value markets the properties could be at 105% by the time the loan closes and 120% within a few months?

Just HOW the heck is this going to solve anything? Talk about a band aide measure! Geez!

Perhaps the "sky is falling"???