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Guest

Hi All,
I have been dealing with BoA to close on our home on Apr 9th. We have just been informed that our conventional loan that required 5% down will now require 10% due to our county becoming designated a high foreclosure risk by FMae and FMac. I have never heard of this and I feel taken advantage of since we are so close to closing and now the terms have changed. The loan officer knows my financial situation(that I have cash) and that I still can make it happen. Is this for real and if I go somewhere else will I run into the same problem? Will I be able close in time?
Confused

gmakerley · Posted: Thu Mar 11, 2010 9:59 am Post subject:

i'm quite sure that you're not getting tricked, and that this is a true situation. in what are now considered high-risk areas, due to mortgage defaults and foreclosures, lenders must ask for larger down payments. your cash situation isn't relevant in this case, though it's wonderful you have the ability to meet the new requirement.

the data changes periodically, and the new rules and regulations are set based on new data, so it's not unusual that you wouldn't hear of this. not only that, it's not necessarily at the tip of the tongue of your loan officer, who may have been blindsided by this change.

Guest

I appreciate your informed reply. Its nice to have an outsiders advice once in a while when all I'm getting is friends, family, and people who charge me for it.

jveenstra · Posted: Tue Mar 16, 2010 10:20 am Post subject: Down Payment

If you would disclose the zip code of the subject property we can check quickly for you.
There are five or six major Private Mortgage Insurance (PMI) companies and they each set their own Declining Market Areas. I suppose Fannie Mae and Freddie Mac could have set their own declining market areas like for condominiums in Florida, areas of California and Michigan and Nevada and Arizona as far as their mortgage programs are concerned.
However, the PMI restrictions are set by the PMI companies.
I ask you to provide the zip code because not all lenders work with all the PMI companies. I would assume B of A does so, but, I do not know.
The two most leniet PMI programs right now are Radian Platinum Plus and MGIC in Tier I designated areas. IF your zip code is in Tier II, it is definitley 10% down and not 5% down.
It is a little unusual, not impossible, that an area became Tier II recently.

Anyway, tell us the property zip code and we can check it out.

gmakerley · Posted: Tue Mar 16, 2010 1:41 pm Post subject:

and i should have noted this earlier. if you are computer-savvy, you can check out the declining markets for yourself. the mortgage insurance companies have that information on their websites. now, their sites are predominantly going to be used by the lending community, but there's no reason a consumer cannot do his or her own research there as well. in fact, it might be faster - you have a vested interest in learning about it and it might just take longer to engage a lender to get the information for you. most of them are busy doing other things, after all.

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NEW DOWN PAYMENT REQUIREMENTS?