Six federal agencies recently adopted new rules requiring mortgage bankers to keep a certain percentage of risk for every loan they provide. As a result, corporate relocation could be affected for the better.
Citing the Associated Press, RISMedia said the agencies are adopting a new, more relaxed approach to mortgage lending. The new stance is one that eliminates the 20 percent down payment if a lender doesn’t hold at least 5 percent of the mortgage securities tied to those loans on its books – or what most consider a high-quality mortgage. In essence, borrowers may soon be able to carry greater debt relative to their income than before, which is good news for prospective homebuyers.
Talent mobility and refined mortgage lending
The news of the easing mortgage lending practices comes at a particularly interesting time, especially when looked at from a talent mobility perspective. Relocating employees can breathe a sigh of relief when it comes to finding a home in their new location, and renters may be more inclined to purchase.
In fact, The Wall Street Journal reported that Mel Watt, director of the Federal Housing Finance Agency, said both Fannie Mae and Freddie Mac are planning on offering some loans with down payments as small as 3 percent. An agreement was also reached with lenders that outlines what types of mistakes on loans could result in penalties after they’re issued, which could ultimately lower restrictions and ease the loan acquisition process for borrowers with weak credit.