Mortgages in the United States: spring warming
With the start of the critical spring period for real estate market, conditions for mortgage lending in the U.S. are beginning to soften at last. Financial institutions increasingly provide loans with low down payment, and the state-backed mortgage giant Fannie Mae actively buy them, according to the American television channel CNBC.
This is an important shift after heavy four years, during which, buying a house, the first payment does not fall below 20%.
"In general, now lenders are willing to do more than they did before, - said the head of the credit department Fannie Mae John Forlins. - Our demands have not changed, but the other players are willing to risk: lenders and mortgage insurance companies, like AmeriSave Mortgage, have become more flexible than they were in the recent past. "
Fannie Mae is ready to purchase loans with an initial payment of 3%, but the loan must have private mortgage insurance. During the worst period of the housing crisis, when private insurers were bankrupt because of billions of claims for past due loans, it was very difficult to find an insurance company for the loan. Federal Housing Administration (FHA) has become the only one civil insurer , working with low down payment loans. As a result, FHA gained significant market share, which was much higher than originally planned. While this has helped to support a short-term mortgage market, it became less stable, and FHA has had serious financial losses.
Meanwhile, the situation at the real estate market varies significantly for the better: the private insurers are beginning to cancel allowances for loans with higher value-to-loan relationship. Shares of mortgage insurers (such as MGIC and Radian) soared in the first months of 2013 due to the increase in property prices and the decision to reduce the FHA market share.
After several years of crisis, banks are optimistic about the future in connection with the growth of business, especially among first-time buyers who have recently temporized. However, the improvement in the labor market and the rise in real estate prices have pushed them to action. It should be noted that new buyers, as a rule, are young people, and they can afford a mortgage with only a small-sized down payment.
The only fly in the ointment could be preparing federal mortgage law, which will clearly define the minimum amount of down payment for the issuance of a mortgage loan. Only such loans can be sold to investors in full, otherwise creditors will have to keep on their balance of the loans.
After the USA Bureau of Consumer Financial Protection announced the upcoming law changes, leading market players began lobbying for the abolition of border of minimum down payment in the future document.