FINALLY a piece of good news. Did you all see the announcement on Friday from Fannie? They will allow up to 10 financed properties on a borrower again. TIGHT guidelines to do it (720+, <70% LTV, lots of reserves), but to allow these to come into play again is huge. Tried to attach the announcement but can't seem to figure out how, it's on efanniemae.com though under new announcements.

AC

here is the link

https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0902.pdf

Yes but what investor will step up and do it?

April 1st right? Does anyone else see the issue with making anything effective on April 1st?

Next announcement will probably change the LLPA from 1.75 & 3.00 to 5.00 & 7.00.

Last time I had a company make an announcement on April first, it was to tell us that they were shutting down our retail operation to focus on wholesale.  My how times have changed.

John Rodgers:

Yes but what investor will step up and do it?

John, I've got plenty of investors who own from 5-10 properties right now who, even with the LLPA's would love to pay points for them upfront and get a 5% 30 year on their cash-flowing long term properties. I've also got a few guys who are buying for cashflow, that have excellent credit and plenty of money, but couldn't get financed after 4 that are going to be thrilled with this. It's certainly not an economic cure-all but in my opinion this is the biggest guideline reversal we've seen yet.

AC

Edit to my previous post, I note you said 'investor' not 'investors', after reading my response I'm assuming you were stating what investor, as in lender, is going to offer this. I would imagine that the big boys will fall in line. Fannie has never issued a guideline that hasn't been followed, that's the way it works, Fannie/Freddie don't make a call in this economy without the backing of the top 2 or 3 banks, which seem to be essentially government owned already. It's a matter of time til someone says I do and the rest follow.

AC

I am seeing an effective date of March 1st with a DU update in April?  Excellent news either way..............

Are you guys living in the same world I am? i doubt lenders are willing to jump into any market right away regarless of what the agencies say right now. With "Overlays" being envogue these days I would error on the side of caution when it comes to Fannie's looser guides.

John Rodgers:

Are you guys living in the same world I am? i doubt lenders are willing to jump into any market right away regarless of what the agencies say right now. With "Overlays" being envogue these days I would error on the side of caution when it comes to Fannie's looser guides.

just like subprime, what do originators care if they're just going to package it and sell it to Fannie...

There are very good reasons to let investors refinance properties. The biggest is that many are on ARMS and unless they get to do something a bunch are going back to fannie and freddie. It's about time they do something to help the people who move the housing market (investors) move forward.  I've spoken to many that want to purchase but can't because they already have more than 4.

This should help move properties and reduce inventory.  It's not risky with the loan to value and appraisal restrictions like it has been in the past.

John Rodgers:

Are you guys living in the same world I am? i doubt lenders are willing to jump into any market right away regarless of what the agencies say right now. With "Overlays" being envogue these days I would error on the side of caution when it comes to Fannie's looser guides.

John, I'm curious, I could be wrong, but when was the last time that Fannie/Freddie made an actual guideline that ALL lenders ignored? I honestly can't think of anything. I'm not talking an LLPA price bump, or their own higher minimum credit score, etc. I mean a true guideline, that lenders completely ignored? Like I said, maybe something is slipping my mind, but I don't know of a single time when Fannie or Freddie have made a guideline that has been completely dismissed by lenders.

AC

AC,

First of all I never used the word IGNORED or All as part of my response. Surely not ALL lenders operate the same but with fewer and fewer to chose from the table will be set by a select few.

Second, I learned more than 10 years ago that GUIDELINES are not RULES. A guideline is any document that aims to streamline particular processes according to a set routine. By definition, following a guideline is never mandatory (protocol would be a better term for a mandatory procedure). Guidelines are an essential part of the larger process of governance.

So to answer your question would be impossible because I don't use ALL lenders but I can give you an example of a GUIDELINE that was IGNORED by Wells Fargo (I think they are now either the largest or second largest in the nation and may qualify as one fo the 2 or three big boys you described earlier in this thread).

Fannie Mae allows a borrower who has successfully completed a Ch 13 bankruptcy to obtain a Fannie Mae loan two years after discharge (Refer to https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf). Wells Fargo requires borrowers regardless of bankruptcy type to wait 4 years.