WASHINGTON — A closely watched index that tracks mortgage credit availability — lender requirements on credit scores, down payments and other key loan terms — has some good news for potential homebuyers: Things are finally loosening up.
After years of progressively tighter rules on borrower eligibility in the wake of the housing bust, banks and mortgage companies have begun modestly easing their requirements and even expanding the types of mortgages they offer. The Mortgage Bankers Association’s latest credit availability index reported improvements in all four of its loan categories during January. The improvements mainly reflect positive lender responses to government efforts to ease regulations and improve affordability in the housing market — all of which means an improved environment for mortgage shoppers.
Among the initiatives: Giant investor Fannie Mae’s allowing of purchases of conventional mortgages with as little as 3 percent down. Freddie Mac, another major investor, is planning to begin similar 3 percent down loan purchases for mortgages closed on or after March 23. According to Mike Fratantoni, chief economist for the mortgage banker’s group, “roughly 40 percent of investors” already have begun offering the Fannie 3 percent down program. The guidelines for the Freddie Mac program are in lenders’ hands and there’s likely to be a strong rollout for it.
read more at: http://www.bostonherald.com/business/real_estate/2015/02/lenders_easing_requirements_for_mortgages
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