Monday, October 14, 2013

Freddie and Fannie ease lending rules

Some government backed loans won’t be hamstrung by the government shut down.
Fannie Mae and Freddie Mac have relaxed rules requiring lenders to verify a borrower’s income with the IRS before closing on a mortgage, a process that because of the U.S. government shutdown would have kept banks from approving mortgages.

When some lenders reported last week that they could not approve mortgages because the shutdown had severely curtailed the IRS's operations the two government-backed mortgage giants loosened their otherwise stringent requirements.

They allowed lenders to continue to issue new loans without the IRS's confirmation. Borrowers will still need to sign an income verification request with the IRS, but verification will wait until the IRS is back to full work mode and lenders can verify a borrower's income.

-From CNN Business wire

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