Skip to comments.FANNIE MAE JEOPARDIZING THE DREAM OF HOME OWNERSHIP
Posted on 06/25/2003 9:31:04 PM PDT by MeneMeneTekelUpharsin
ARLINGTON, Va., June 25 /PRNewswire/ -- Policy changes affecting manufactured home lending practices recently announced by Fannie Mae jeopardize the dream of homeownership for thousands of low- and middle-income American families, as well as eliminating the housing equity of existing homeowners. Members of the manufactured housing industry delivered that important message during recent visits with Members of Congress.
"Recent actions by Fannie Mae are jeopardizing the opportunity for homeownership for low- and middle-income families across the country and we felt that the Congress should be fully aware of these unreasonable, discriminatory policy changes," stated Chris Stinebert, president of the Manufactured Housing Institute (MHI), a national trade association representing manufactured and modular housing industry. "It's particularly ironic that Fannie Mae, which is chartered by the federal government to promote homeownership, would take these steps to limit homeownership in June, which is 'Homeownership Month,' declared by President Bush to promote homeownership and its many social and economic benefits."
Under the policy changes announced by Fannie Mae on June 3, 2003 and effective by August 24, 2003, consumers wishing to finance a manufactured home with a 30-year mortgage would have to have a 10 percent minimum down payment, as opposed to a zero to five percent down payment for other forms of housing. Additionally, consumers financing a home for 20 or 30 years would have to pay a "manufactured home" penalty at closing of one-half of one percent of the loan. These policy changes also eliminate "cash-out refinances" on 30-year mortgages. Currently, when homeowners refinance their home, they can borrow up to 80 percent of their home's equity. Home refinancing during the past two years has fueled the economy. However, under the new Fannie Mae guidelines, homeowners would not be allowed to take any equity out of their home through a 30-year mortgage refinance.
"By increasing down payment and closing costs, Fannie Mae's actions will deny homeownership to many low-income people, particularly in rural communities," Stinebert stated. "In addition, their prohibition on cash-out refinancing will prevent many Americans, especially senior citizens, from using their home equity for vital needs, such as medical care, education and other living expenses."
"Manufactured housing has always been a primary source of affordable housing in the U.S. for low- and middle-income homebuyers, first-time homebuyers, and fixed-income senior citizens, who generally pose a higher lending risk. That, coupled with the prolonged downturn in the U.S. economy, has led to higher default rates," noted Danny Ghorbani, president of the Manufactured Housing Association for Regulatory Reform. "Fannie Mae officials openly admit that they do not know the total number of manufactured home loans in its portfolio, yet they took this unreasonable and discriminatory approach to reduce its 'risk' to satisfy its shareholders and Wall Street."
During the visits to over 100 offices of Members of Congress, industry representatives called on Fannie Mae officials to work more closely with the industry to develop better quality control procedures that will improve loan performance but not end the chance for homeownership for thousands of Americans. Members of Congress were very supportive in their comments and indicated that they would call on Fannie Mae officials to reexamine its excessive policy changes.
"Simply discriminating against homes because they were built in a factory will not solve the problem," Stinebert stated. "A complex problem deserves more than a cookie-cutter solution, and the manufactured housing industry stands ready to devise meaningful reforms that will improve Fannie Mae's loan portfolio performance while maintaining consumers' access to one of the largest sources of affordable housing." Manufactured Housing Institute
CONTACT: Bruce Savage of Manufactured Housing Institute,+1-703-558-0662
Web site: http://www.manufacturedhousing.org/
They're made in factories and transported to the building site in sections.
Veterans get a zero down guaranteed (no PMI) mortgage. VA loans and in Texas a VLB loan as well. One of the best benefits for going into active service/combat.
Yes it is. However, it highlights what is going on behind the scenes if you read between the lines. Did you read MY comment?
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