New FHFA Rules Likely to Boost Property Loans
At the start of the new year, Jan 1, 2013, lenders will have more incentive to make loans available to consumers who want to purchase property. New guidelines announced by the Federal Housing Finance Agency (FHFA) will limit banks’ risk exposure to defaulted mortgages by clearly defining the lenders’ repurchase exposure and liability. By specifically outlining when a lending institution has to repurchase a defaulted or foreclosed loan from Fannie Mae or Freddie Mac, lenders will have more freedom to establish their own reasonable standards and criteria for lending money for the purchase of real estate.
The financial crisis of 2008 and the subsequent foreclosure crisis caused many lenders to become extremely leery of making any kind of real estate loans. Part of the problem was that they were required to buy back loans that they had sold to Fannie Mae and Freddie Mac after the loans defaulted or went into foreclosure. Many lenders believed they had complied with the requirements for screening borrowers and documentation of income and value of a property, and they claim to have suffered significant financial losses when they were required to repurchase the loans.
The new FHFA guidelines clarify the requirements for screening borrowers and documenting credit worthiness and income so that lenders will have a better idea of when they may be required to repurchase foreclosed loans. The new guidelines also call for closer scrutiny of property appraisals in the loan process. Given these new requirements, those interested in purchasing property in Orlando may wish to consult with an Orlando commercial real estate appraiser at Commercial Investment Appraisers for information on how the new guidelines will impact their Orlando commercial real estate appraisal. Our appraiser may need to work more closely with a lender to ensure that the Orlando commercial real estate appraisal helps both the bank and the potential borrower comply with the new FHFA guidelines.
For more information, or to schedule an appraisal, contact us at 407-929-8080 or info@commercial-appraisers.com.
