Costa Mesa's Neighborhood Blog

A blog about Newport and Costa Mesa with an emphasis on Costa Mesa Real Estate and Newport Beach Real Estate, written by a lifetime local resident of coastal Orange County whose knowledge of the area, combined with a strong background in mortgages, real estate and being an attorney, gives her clients many advantages.

Fannie Mae Does Away with Declining Market Policy - Replaces with National Downpayment Policy

On May 16, 2008, Fannie Mae announced that they are withdrawing their Declining Market Policy and replacing it wtih a National Downpayment Policy. 

Under the new policy, Fannie Mae will allow loans that are underwritten by Desk Top Underwriter® (DU®) a loan to value (LTV) of up to 97% and 95% for loans that are manually underwritten. 

This new policy becomes effective June 1, 2008 and will apply to one unit owner occupied properties.  This policy will replace the Declining Market Policy which required the lender to reduce the maximum LTV and CLTV (combined loan to value) by 5% in declining markets. 

This may be helpful for places like California and Orange County that are effected by a declining market.

We'll have to wait and see if this will help the housing market,  I'm still unclear on how the MI companies are reacting to this decision by Fannie Mae which may limit its usefulness.

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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? For more information see Options to Foreclosures, understanding short sales or contact me at christine@donovanblatt.com to discuss your options.

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Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.

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Comment balloon 12 commentsChristine Donovan • May 19 2008 10:34PM
Fannie Mae Does Away with Declining Market Policy - Replaces with…
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On May 16, 2008, Fannie Mae announced that they are withdrawing their Declining Market Policy and replacing it wtih a National Downpayment Policy. Under the new policy, Fannie Mae will allow loans that are underwritten by Desk Top Underwriter… more