Mortgage Rate Adjustments in Some ABQ Areas

This just in from my friend, Jason Pike at Countrywide: You might have heard about a 5% reduction to the maximum loan-to-values (LTV) on properties that are classified as "soft market". This is starting to hit the street and if you have concerns, pay close attention to offers that are coming in with zero down payment. In December, the Albuquerque Area made the map as an area that could see values decline. The category that our area falls into requires the lenders to rely on the appraisal. Other areas such as Phoenix and Las Vegas are mandated to follow this policy regardless of what the appraisal states. The MAXIMUM LTV must be reduced by 5.00% IF the appraiser identifies the property as follows: 1. The property is located in a declining market. 2. OR the area has an over supply of inventory. 3. OR the property lies in an area that has a marketing time of six months or greater. What does this mean? The first thing to understand is that it means NOTHING on FHA or VA transactions!!!!!!!!!!!!!!!!!!!!!!!!!! This only affects HIGH LTV's. So if a borrower planned on a 5% down payments and the property was identified as above, the borrower would need to be relocked into a 100% program. If the borrower planned to finance 100%-they would be out of luck!!! INVESTORS - Assume the required down payment is 20% and the property falls in one of the categories. The investor would be required to have an additional 5% down payment.