It amazes me, the pathetic actions of the people that run this country and its largest companies. They have no long term vision, they fail to act in a timely manner and then after the disaster they act in a way that makes it worse!

Fannie Mae is changing their Conventional Loan Guidelines to make it more difficult for a home buyer to qualify for a mortgage as of December 12, 2009. Let’s see, do we make it harder to get a loan when home values are so over stated it is ridiculous or do we make it harder when home values are so low and over sold, most every smart buyer is getting the Steal of a Deal???

Answeer for Fannie Mae: when the market is over valued and a crash is immenant, they make it easier to get a loan to continue fueling the fire. Oh, and by the way, they are fully aware of the issues and they keep them private. When home values are so low and over sold that a bounce of 10 to 20% should occur over the next 12 to 18 months, they make it harder for a person to qualify for a loan. OK, I get it, a a a a a a a a, what I thought I got it. Who is this helping? Why are we trying to extend the pain? The pain they caused, these same guys that get paid millions if not tens and hundreds of millions to screw it all up. What kind of logic is this? It is short term and it ignores the whole picture!

If we look back at history, we will see these types of actions happened over and over again. The guys at the top are so detached from the reality of today, they don’t know how to respond. History has taught us over and over these types of actions prolong and strengthen the problem. Let’s work on fixing the issue in lieu of making it worse, OK?

Watch Brian Stevens and Frank Garay, with Think Big Work Small, give their take on Fannie Mae’s decision to change Conventional loan guidlines.

http://www.thinkbigworksmall.com/mypage/player/tbws/20477/1457274

Or, here is another article I found at Quicken Loans Blog. I hope these help you understand this subject better!

Nov. 17, 2009

Fannie Mae Changes Conventional Loan Guidelines

With the first-time home buyer tax credit extension comes a new crowd of borrowers, looking for a new home and a new loan.

However, home buyers are going to be experiencing tightening guidelines if they’re looking for a conventional loan. Fannie Mae recently announced a change in requirements for the debt-to-income ratio in home buyers who choose a conventional loan. How does this affect you?

Well, with the exception of FHA and VA loans, most loans are considered conventional including 15 and 30-year fixed, as well as the 5-year ARM.

So, if you want a conventional loan, there may be some difficulty starting after December 12th, 2009. To qualify for a loan amount, lenders use various factors to determine your eligibility. Among them, is the debt-to-income ratio.

https://www.quickenloans.com/mortgage-news/fannie-mae-changes-conventional-loan-guidelines-5805