Banking Expert: New Rules May Free Up More Money For Mortgage Lending
By Michelle Durham
PHILADELPHIA (CBS) - A new policy announced by Fannie Mae and Freddie Mac, the two government controlled entities that underwrite millions of American mortgages, may be good news for those seeking a new mortgage as well as the banking institutions issuing them. The new rules could potentially make more money available for those looking to buy a home.
John Giordano, CEO of First Heritage Financial, says he’s seen a shift in the past year from a refinance market to a purchase market.
“We have seen both with both very large lenders and smaller lenders a 70-percent differential in closed home production,” he said. “That is very good news.”
What does this mean for prospective homebuyers?
“I think there a lot of people who would look at this marketplace as a time to buy.”
What does this mean for lenders?
“From an administrative point of view, using these guidelines, we will be able to pre-approve and approve more loans.”
A vote this week is scheduled in the Senate on legislation to potentially phase out Fannie and Freddie. Giordano says they are waiting to see what happens.