patrick.net

There’s been a lot of talk claiming that new mortgage rules will soon require borrowers to put down 20 percent if they want to buy a home. Such talk is nonsense.

Loans inside the safe harbor are called qualified residential mortgages or QRMs. Despite claims that borrowers will soon only be able to finance with at least 20 percent down, the QRM rules say exactly the opposite.

To understand why you need to know which mortgages are inside the safe harbor. These loans include:

*FHA loans with 3.5 percent down.

*VA loans with as little as nothing down.

*Conventional loans with as little as 5 percent down; that is, loans sold to Fannie Mae and Freddie Mac.

*Portfolio loans, mortgages originated and held by lenders.

Not only will there be some loans available with little down under Wall Street reform, MOST loans — about 80 percent — will be available with little down. How do we know? Laurie Goodman with the Amherst Securities Group has testified before Congress that in total our mortgages are worth $10.6 trillion. Of these, $5.4 trillion are insured by Fannie Mae, Freddie Mac or Ginnie Mae and another $3 trillion are in lender portfolios.

http://www.ourbroker.com/mortgages/why-you-wont-need-20-down-for-a-mortgage-loan-06291/

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