Ultra Subprime on the way

Just saw this piece of "good news" for US real estate market. The way out from depression may be ultra subprime..lol...

Fannie bends the rules.
In an effort to break the logjam in mortgage refinancing and allow homeowners to take advantage of record low rates, Fannie Mae (FNM) is bending the rules - dropping credit-score requirements, ignoring income-documentation standards, and waiving the need for appraisals. A Fannie Mae spokesman said the program 'will streamline' refinancing 'for potentially millions of current mortgage holders.'
source: Bloomberg
Bloomberg.com: Worldwide

hahaha, they never learn

Actually guys, this is a real issue - look at carmaker credit, GM have openly stated that they will now arrange finance for someone to buy a car who wouldn't have qualified previously - their resolution to the credit crunch is by lending to other less credit-worthy individuals!

Combine that with the surging rates of defauts in Alt-A mortgages, and the picture doesn't look good: getting rid of marking to market doesn't make sense if the free'd-up capital is going to be used for collateral agains credit loans to those who didn't cut the muster in the first place.

Its crazy!

total madness, they plan to help a situation which was caused by reckless lending in the first place by doing exactly that..these people should be dragged into the street and shot!

Maybe they sought advice from a certain one eyed Scottish idiot.

LOL - one eyed scottish idiot and a road raging wanker - what a combination!
someone should make a movie!!

/o\

UK house prices were up for Jan?????

leovirgo said:

Just saw this piece of "good news" for US real estate market. The way out from depression may be ultra subprime..lol...

Fannie bends the rules.
In an effort to break the logjam in mortgage refinancing and allow homeowners to take advantage of record low rates, Fannie Mae (FNM) is bending the rules - dropping credit-score requirements, ignoring income-documentation standards, and waiving the need for appraisals. A Fannie Mae spokesman said the program 'will streamline' refinancing 'for potentially millions of current mortgage holders.'
source: Bloomberg
Bloomberg.com: Worldwide

Click to expand...

What a Joke! They can't be serious!

I dont think they're saying everyone will be able to refinance if their home is worth less than the remortgage. A majority of the people cant refinance because of the tighter lending criteria the banks have set.
I have seen about 6 clients in the last 3 weeks that have more than 30 to 35% equity in their homes and are paying up to as much as 9% on Standard Variable Rates because their original deal had expired. But yet they cant remortgage to a current rate of between 3 to 4.5% because the income multiple has reduced.
This may cause some to lose their homes when clearly if they can remortgage now they can take advantage of the lower rate therefore paying less and keeping their home.
Ive recently spoken to a client wherby he had 12 months left of his fixed rate deal and his bank scrapped his redemption fee and all other fees to put him on a new lower rate with them so he can stay in his house. The banks are behind the scenes doing a bit to help out considering they caused the mess.
Another well known lender has contacted all of their customers and told them they wish to surrender their book of customers and they can leave immediately without any penalties whatsoever.

Banks have been helped out. The motor industry has been given a handout by our own taxpayer money. Yet when a bone is thrown to the people that didnt cause it and need it some people think its unbelievable.

Just dont get it sometimes.

Leovirgo this is not a pop at you. Replied to your post and ended up a bit of a rant.

leovirgo said:

Just saw this piece of "good news" for US real estate market. The way out from depression may be ultra subprime..lol...

Fannie bends the rules.
In an effort to break the logjam in mortgage refinancing and allow homeowners to take advantage of record low rates, Fannie Mae (FNM) is bending the rules - dropping credit-score requirements, ignoring income-documentation standards, and waiving the need for appraisals. A Fannie Mae spokesman said the program 'will streamline' refinancing 'for potentially millions of current mortgage holders.'
source: Bloomberg
Bloomberg.com: Worldwide

Click to expand...

_JWG_ said:

What a Joke! They can't be serious!

Click to expand...

Go and read this weeks economist re: Alt-A