Yet more good news for home buyers planned just in time for Christmas:
“Fannie Mae, the giant mortgage finance company that helps shape lending guidelines, plans next month to raise minimum credit score requirements and limit the amount of overall debt that borrowers can carry relative to their incomes.
Starting Dec. 12, the automated system that Fannie Mae uses to approve loans will reject borrowers who have at least a 20 percent down payment but whose credit scores fall below 620 out of 850. Previously, the cut-off was 580.
Also, for borrowers with a 20 percent down payment, no more than 45 percent of their gross monthly income can go toward paying debts. Fannie declined to disclose the previous threshold, except to say that it was higher. The company will raise the level to 50 percent in cases with “strong compensating factors.”
This is extraordinarily ironic. The big banks have been bailed out and now they want to further significantly cut the pool of eligible home buyers.
The full article –
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/25/AR2009112503415.html
