Fannie Mae just announced a withdrawal of their declining market policy "Lenders are no longer required to make a downward adjustment to the LTV, CLTV, or home equity CLTV (HCLTV) based on the location of the property." Here is the breakdown:
- Fannie Mae withdraws their declining market policy effective 6-1-08;
- Declining market policy is replaced by a "National Down Payment' policy which reduces maximum allowable LTVs for 1-unit primary residences;
- 95% is the maximum LTV, CLTV, HCLTV for manually underwritten loans;
- 97% is the maximum LTV, CLTV, HCLTV for DU underwritten loans, including MyCommunityMortgages® and Flex mortgages;
- CLTV of 105% with Community Seconds® is still allowed;
- Effective date is for applications taken on or after June 1, 2008.
So still no 100% products out there from Fannie. Freddie Mac followed suit with the same withdrawal. A sign of the turn in lending tightening??? Probably not I am reading what MI companies are going to say about all of this.