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Albuquerque, New Mexico Real Estate
In our community, not unlike many others, we have seen transactions affected by recent higher loan-to-value ratio requirements resulting from falling and lower sales prices.
Good News
Beginning June 1, Fannie Mae and Freddie Mac will no longer require borrowers to provide an extra 5 percent down payment when purchasing homes in areas deemed "declining markets" because prices are falling.
Thanks to the National Association of REALTORS® who protested the declining-markets policy, the giants of the secondary loan market agreed to abandon it.
under the the new policy, borrowers can get loans up to 95 percent loan-to-value even in markets in which prices have been falling. Before the change, borrowers suddenly found they could only get loans up to 90 percent of the price of the property because lenders were requiring a 5-percentage-point cushion to protect against possible future price declines. Many buyers saw their home ownership dream vanish overnight as lending policies changed in the midst of negotiations.
With the stigma removed, we expect to see all neighborhoods thrive and fewer people denied the American dream.
Eloise Gift, Associate Broker
Keller Williams Realty
Albuquerque
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