Freddie Mac $20 Billion Pledge to Help Subprime Borrowers
Freddie Mac announced last week that it will purchase $20 billion in fixed-rate and hybrid adjustable-rate mortgage (ARM) products that will provide lenders with more choices to offer subprime borrowers.
The products are still being developed by the company and are slated to be introduced by mid-summer. They are designed to limit payment shock by offering reduced adjustable rate margins, longer fixed-rate terms and longer reset periods.
“Today, we’re again ramping up our commitment through this $20 billion pledge to assist families caught up in the subprime crisis and to make the market more stable and transparent for all borrowers,” Richard Syron, Freddie Mac chairman and CEO, told an April 18 Homeownership Preservation Summit convented by Sen. Christopher Dodd (D-Conn.) and attended by Sen. Richard Shelby (R-Ala.).
Freddie Mac previouisly announced that it would not buy subprime mortgages that have a high likelihood of excessive payment shock and possible foreclosure.
Among other things, Freddie will require that subprime ARMs — and mortgage-related securities backed by them — qualify borrowers at the fully indexed and fully amortizinig rate.
The company also will limit the use of low-documentation products in combination with these loans; require that loans be underwritten to include taxes and insurance; and strongly recommend that the subprime industry collect escrow for taxes and insurance, as is the norm for prime mortgages.
For more information on mortgage lending resources available from NAHB, e-mail Bill Renner, or call him at 800-368-5242 x8597.
How Deep Is the Correction? Attend Construction Forecast Conference on April 26
Will housing demand outweigh affordability hurdles, inventory overhangs and the retreat of investors? Where are home prices headed?
Get the answers to these and other questions at the Construction Forecast Conference — Spring 2007 on Thursday, April 26 in Washington, D.C.
Panels of nationally recognized experts will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys at the day-long conference.
For more information and to register, click here.
Can't Attend in Person? Webcast of Conference Also Available
The conference is also available via Webcast. For Webcast information, visit www.nahb.org/cfcwebcast.
Want to Know Your State’s Starts Forecast for 2008?
Find out in HousingEconomic.com’s State Starts Forecast (sample). The starts forecast includes downloadable Excel tables of total, single-family and multifamily starts by region and state.
To learn more, visit www.housingeconomics.com.
NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market
With the current cooling of the nation’s housing market expected to persist into next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.