Lending Update.

For at least five years, I listened to Dave complain about loose mortgage standards, concerned about where it was all leading. He wasn’t alone. Many people were concerned throughout those years, but it’s easier to whistle through the graveyard than to face the demons.  If given a choice, most people prefer the company of a drunken sailor to that of  the head master with standards. So here we are, trying  to sober up after the spree and right the ship.

Part of the drying out includes some new standards that were just announced from Fannie Mae and FHA. Fannie has indicated that it will reject borrowers with credit scores below 620, even if they have the 20% to put down for their purchase. So it looks like you’ll still have to do penance for your past transgressions even if you have the cash to get through the gate.  Likewise, FHA has said it will require borrowers with credit scores below 580 to put down at least 10% in order to go forward. Those with credit scores above 580 will still be able to get in the game with only 3.5% down – still a pretty low threshold!

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