As many LGBT borrowers have heard through recent media reports, the huge mortgage agency Fannie Mae might get scrapped later this year. Whether or not that will adversely affect LGBT home buyers, LGBT homeowners wanting to refinance, or LGBT sellers hoping that their buyers qualify for a mortgage is suddenly a big concern.
Meanwhile Fannie Mae instituted much more stringent underwriting policies in February, requiring banks and other lenders to take a closer look at borrower credit and debt profiles. These higher standards could potentially have a significant impact on the mortgage loans of many consumers, especially those who are not aware of how to successfully respond to them in 2011.
Fannie Mae (the nickname for the Federal National Mortgage Association) participates in the majority of home mortgages that are made in the USA. But Fannie Mae is not a direct mortgage lender. Instead it underwrites and insures mortgages that banks and other lenders can then provide to Americans at less expensive rates. But the agency was poorly managed during the years leading up to the subprime mortgage crisis and it has been hemorrhaging money ever since. Now officials are talking about closing down the inefficient Fannie Mae and letting private banks and lenders handle Fannie Mae’s responsibilities.
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