Monthly Archives: October 2014

Will New Easier Lending Rules Cause a Bubble?

    The government and the GSEs Fannie and Freddie have relaxed the rules for mortgage underwriting this week. Now lenders can have 5% down payment loans without retaining ownership in a loan they sell to bond investors, as long as they verify income. This is good. The fundamental problem of the mortgage crisis was an explicit refusal to allow no-income verification loans which enable people to borrow too much. The threat of a low down payment loan is a myth because those loans typically were underwritten far more strictly than ones with a large down payment. There were some lenders in their 1997-2007 mortgage bubble who did allow low down payment loans to be used with a no-income verification loan

October 22nd, 2014|mayflowercapital blog|Comments Off on Will New Easier Lending Rules Cause a Bubble?