It will be easier to get a Mortgage Loan


New guidelines go into effect today aimed at making mortgage lending easier. The new standards stem from an agreement in October put in place to clarify when banks would be penalized for making mistakes on mortgages they sell to Fannie Mae and Freddie Mac.

Yahoo Finance Senior Columnist Michael Santoli says because the banks themselves are risk averse after the mortgage meltdown, they are very conscious of exactly what they are allowed to do and how they are supposed to treat loans. “They apparently had very unclear guidance from Freddie and Fannie about the rules of the road,” he says, “in terms of which types of mortgages were going to be acceptable for Fannie and Freddie to buy.”  Lenders have said this lack of clarity is why credit is tight and many consumers aren’t qualifying for loans. The Urban Institute says 1.2 million additional home loans could be made per year as a result, according to the Wall Street Journal.

Borrowers may see changes in the lending process within weeks. That may include a quicker turnaround time for mortgage applications. The Wall Street Journal says now it can take two months or longer from the time a consumer files an application for a loan to when the loan is actually made. Santoli says, “It makes a whole lot of sense to just unclog this one piece of the mortgage market.”  But, he points out, “that’s only one reason that banks maybe aren’t lending as heavily.”

Demand for loans and the credit worthiness of borrowers have also forced banks to pull back on lending. Tight credit has been blamed for slowing the housing recovery.  But banks are expected now to relax some of their credit requirements and give prospective borrowers more consideration, particularly those whose credit score took a hit because of one-off events, like loss of a job or a single large medical bill.


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Dennis Spencer
Dennis Spencer was born in Toulouse and spent his childhood there before moving to Bordeaux for his bachelor at KEDGE Business School. Reason for him to go study in Bordeaux was the school’s recognition and the need to move away from his parents to learn autonomy and grow older. In the meantime, Bordeaux is a bigger city than Toulouse and Louis can go surfing in less than an hour. Louis is passionate about extreme sports in general. He has been practicing skateboard for years. Louis had a girlfriend in Toulouse but broke up with her when he left the city. He is, since then, enjoying student parties and making new friends.