Fannie Mae and Freddie Mac are both government
sponsored enterprises. They do not originate
loans, but they buy them from lenders like your bank or mortgage company. They buy over half of all loans made! The
main difference between Fannie and Freddie comes down to who they buy mortgages from: Fannie Mae mostly
buys mortgage loans from commercial banks, while Freddie Mac mostly
buys them from smaller banks that are often called "thrift" banks. Working with them
is currently cumbersome, demanding and very time consuming. According to a new report from the Florida
Association of Realtors, they both have
announced plans to speed up and simplify their mortgage buying process.
Fanny May announced it “Day
1 Certainty” initiative that will provide its customers with freedom from
misrepresentations and will warranty key aspects of the mortgage origination
process. They are offering faster
income, assets, and employment validation services to lenders.
Fannie Mae's high-profile changes for
borrowers include:
-Validating loan application data
upfront will give lenders faster verification of key loan data components, such
as income, assets and employment information.
-Borrowers will save time using electronic data versus collecting
documents, such as pay stubs, bank statements and investment account statements.
-Enhanced property inspection waiver upgrades. When a property receives a qualifying score
through Collateral Underwriter, customers will receive representation and
warranty relief for the appraised value of the property.
-Refinance transaction customers are eligible for a waiver of the
property inspection requirement if using Desktop Underwriter.
Freddie
Mac will improve their processes by:
-reducing the cost of originating a loan
-providing a no-cost automated appraisal alternative
-automating borrower asset verification
-automating assessment of borrowers without credit scores
By keeping mortgage interest rates artificially low and improving the speed and efficiency of getting a mortgage, our government is attempting to stimulate the economy by making the purchase of a home easier and less expensive. Palm Coast in particular relies on the home building industry as one of its prime sources of employment and growth. You can read the entire report on the Florida Association of Realtors website, https://www.floridarealtors.org/.
I first learned this information from Toby Tobin’s terrific real estate newsletter at http://gotoby.com/news/article/2856/Fannie-and-Freddie-Plan-to-Streamline-Mortgage-Underwriting
Looking to build or buy a new home
in Palm Coast? Sell one? TALK TO TED !
(386) 503-1101
