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Article: Fannie Mae will purchase refis with just 5% borrower equity. (Federal National Mortgage Association, refinanced mortgages)
- Article from:
- American Banker
- Article date:
- November 22, 1993
- Author:
CopyrightCOPYRIGHT 1993 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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WASHINGTON -- Fannie Mae, bowing to lenders and a leading member of Congress, has agreed to buy some refinanced mortgages with as little as 5% borrower equity. It previously required 10% equity.
The policy shift, announced Friday by agency chairman James Johnson, is expected to spur refinancings in the Northeast and California, where falling house prices have blocked many homeowners from refinancing.
Leading mortgage executives had been working behind the scenes to bring about a loosening of the agency's requirements. The agency also was pushed by Rep. Joseph Kennedy 2d, D-Mass., said a Fannie Mae spokesman.
"Fannie Mae did all Fannie Mae can ...