The U.S. government just gave first-time homebuyers and other budget-minded house shoppers a big boost with a sweeping rule change that provides federal backing to mortgages with down payments as low as 3 percent. The change manifests in two parallel programs: Fannie Mae’s My Community Mortgage and Freddie Mac’s Home Possible Advantage.
The programs both offer fixed-rate loans for candidates’ primary residences. My Community Mortgage, which opened to buyers and owners in early December, offers loans to applicants with credit scores as low as 620. Its refinancing component will initially be limited to candidates who currently hold Fannie mortgages. Home Possible Advantage, which begins in March, may be open to buyers with even lower credit scores and includes a no-cash-out refinancing program open to all mortgage holders, not just current Freddie customers. It also doesn’t establish a hard credit score floor for purchase loans, broadening the pool of potential borrowers.
First time buying a home? You just got a huge boost from the U.S. government
These programs represent the government’s latest effort to assist first time homebuyers and other qualified borrowers to enter the market and become homeowners, but they’re not exactly groundbreaking. Private companies like Prospect Mortgage, a leading national independent mortgage banker led by Fannie Mae veteran (and former CEO) Michael Williams, have offered HUD eligible purchase and refinancing products with low down payments for years.
During Williams’ tenure, Fannie Mae faced down an existential crisis—the quarter prior to his tenure saw a shocking loss of more than $23 billion—and emerged with its strongest balance sheet and loan pipeline in years. After serving as Board Chairman for over a year, Mr. Williams took on the additional role of CEO at Prospect Mortgage in mid-2014) shortly after returning Fannie to a $5 billion quarterly profit, cementing his reputation as a fearless reformer.
The new Fannie and Freddie programs build on the foundation Mr. Williams laid during his tenure as Fannie CEO. Both promise to reduce barriers to entry for first time homebuyers currently priced out of the housing market.
Despite surging profits at Fannie and Freddie, the housing market recovery remains patchy, disproportionately favoring higher-income buyers and those who already own a home. According to the New York Times, the U.S. homeownership rate currently sits near 64 percent, a multi-year low. And first time homebuyers make up just 29 percent of the pool of prospective buyers, far below the 40 percent historic average.
Structural factors, such as stagnating wage growth at the lower end of the income scale, account for some of the discrepancy. But other factors, including traditional mortgage issuers’ overly strict lending criteria and onerous down payment requirements for first-time buyers and refinancing candidates, are a direct legacy of the recent housing bust.
My Community Mortgage and Home Possible Advantage could significantly improve buyer access at the lower end of the income scale, though experts are divided on just how much help they’ll provide. And Andres Carbacho-Burgos, a respected Moody’s economist, warned that any broadening of access would have to be accompanied by a renewed focus on mortgage monitoring and buyer counseling programs to safeguard against a rise in default rates.
Visit Fannie Mae and Freddie Mac online to learn more about their respective programs for first time homebuyers and refinancing candidates.
In the most recent filmed interview with The New York Times, former Penn State defensive coordinator Jerry Sandusky revealed several new disturbing details in regards to his 40 charges of sexual assault against young boys.
Jerry Sandusky did little to discredit the claims of his inappropriately close relationship with young boys, admitting to showering and sleeping in the same bed as them, yet denying that anything further happened.
This is the second interview of Jerry Sandusky since the scandal broke, and in the first he fumbled when asked if he was sexually attracted to young boys, repeating the question and issuing a shallow denial.
In the latest interview with The New York Times, Jerry Sandusky did not improve his answer, only making it worse.
“What in the world was that question,”Jerry Sandusky said referring to the first interview.
“If I say <<No, I’m not attracted to boys>> that’s not the truth because I’m attracted to young people- boys, girls.”
Joe Amendola, his lawyer, who was present for the interview, then jumped in and clarified that Jerry Sandusky did not mean he was sexually attracted to children.
“I enjoy spending time with young people, I enjoy spending time with people,” Jerry Sandusky then said.
In the most recent filmed interview with The New York Times, former Penn State defensive coordinator Jerry Sandusky revealed several new disturbing details in regards to his 40 charges of sexual assault against young boys
There were more surprises in store as well, as Jerry Sandusky discussed the role that other coaches and school officials played.
Legendary head coach Joe Paterno was fired by the school in the wake of the scandal, along with three other university officials. Two of those officials, including athletic director Tim Curley, were arrested for perjury.
Of the eight alleged victims that Jerry Sandusky reportedly abused over the course of 15 years, one incident stands above the rest because it relates to the chain of command at Penn State which is now under review.
In 2002, graduate assistant coach Mike McQueary claims that he saw Jerry Sandusky raping a young boy in the team showers. He then told Joe Paterno, and Joe Paterno told Tim Curley.
This was not the first time that concerns about Jerry Sandusky had been brought to the attention of university officials- there was a complaint filed by the mother of another boy in 1998 that was investigated by campus police- but little seems to have happened.
In the New York Times interview, Jerry Sandusky said that Joe Paterno never spoke to him about either incident.
“I never talked to him about either one. That’s all I can say. I mean, I don’t know,” Jerry Sandusky said.
Throughout the interview, Jerry Sandusky repeatedly said that his actions and relationships with children were motivated by a pure love of children- in a protective and fatherly way as opposed to that of a paedophile.
“It was, you know, almost an extended family,” the former coach said.
Jerry Sandusky admitted to wrestling, hugging, and, in a strange move, blowing on boys stomachs, all of which are details included in the charges against him.
“I think a lot of the kids really reached out for that,” Jerry Sandusky said referring to the wrestling and rough housing.
“I would call kids on the phone and work with them academically. I tried to reward them sometimes with a little money in hand, just so that they could see something. But more often than not, I tried to set up, maybe get them to save the money, and I put it directly into a savings account established for them.”
As he waits for his preliminary hearing on December 13, Jerry Sandusky is very aware of all that he has lost, both at Penn State, at the children’s charity The Second Mile that he founded and allegedly used as a way to find potential victims.
“I’ll miss coaching, I’ll miss Second Mile, I’ll miss Second Mile kids. I’ll miss the relationships with all kinds of people. I’ll miss my own grandkids, I’ll miss my dog,” Jerry Sandusky said.