Lending standards loosen up
It might get a little easier for some borrowers to get mortgages in the coming months. Increased competition among lenders and recent efforts by mortgage giants Fannie Mae and Freddie Mac should contribute to easier standards.
Fannie and Freddie are not direct lenders. They set the guidelines for the types of loans they are willing to buy. Many lenders have been imposing stricter requirements when issuing mortgages to avoid the risk of lawsuits from Fannie and Freddie. Recently, Fannie and Freddie provided more clarity on when lenders can be penalized for loans that go bad after they're sold. The revised rules put some lenders more at ease.
Result: More loans
"I think we may see some more potential lending to make more mortgages available to more buyers." says Jonathan Corr, president of Ellie Mae. "Right now, they can require you to repurchase the loan for pretty much anything, even small clerical errors."