The credit markets continue to evolve and lenders are reacting by continuing to tighten their underwriting criteria

The housing market continues to roll down hill and pick up more casualties along the way. The biggest causality so far is the American home owner, especially hard stricken are first time home buyers, a critical component to helping the market correct. The challenges first time home buyers are facing in what should be a prime home buying market are all related to the credit markets. Most lenders today are requiring a minimum of five percent down payment, even for borrowers with credit scores over 740. Fannie Mae and Freddie Mac have instituted pricing changes for borrowers with credit scores between 620-7000 and over a 70 loan to value. The term "declining market" is now a phrase lenders are using to further reduce your homes value by at least five percent. These changes are going to make it extremely difficult for the housing market to correct itself later this year. There is speculation that the government will work with lenders on a bailout program that will help to truly jump start the industry that seems to have over corrected from its past mistakes. ©LowRateMortgage.com 2-11-2008

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