This week’s C.A.R. Mortgage Update contains information about down payments; the Obama
administration’s Making Home Affordable program; concerns about the viability of the Federal Housing
Administration; and low interest rates keeping homes affordable
A Down Payment Anomaly
Despite home buyers being advised to issue down payments of at least 20 percent, many home buyers are
finding that smaller down payments result in better interest rates—but also higher payments.
Rules put in place in late 2008 by Fannie Mae and similar rules adopted by Freddie Mac are less favorable
to borrowers who put down 20 percent to 25 percent--partially because the GSEs consider these borrowers
to be more of a credit risk since they are not required to purchase private mortgage insurance.
According to Fannie Mae, borrowers benefit from this industry practice because they are able to leave
themselves a financial cushion by not issuing larger down payments, and can instead save the extra money
for emergencies.
It is important to note though that smaller down payments mean higher monthly payments because the loan
itself will be larger.
To read the full story, please click here:
http://www.nytimes.com/2009/09/06/realestate/06mort.html?ref=realestate
To view additional articles please visit the following:
Obama’s mortgage relief program growing
The Obama administration’s $50 billion mortgage relief program is finally picking up speed after a sluggish
and disappointing start: Nearly one in five eligible homeowners has been offered help so far, the Treasury
Dept. said Wednesday.
To read the full story, please click here:
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/09/09/financial/f073010D13.DTL&type=business
Behind FHA Strains, a Push to Lift Housing
As it tried to help shore up the ailing housing market during the past year, the Federal Housing
Administration increased its exposure, particularly to mortgages in high-cost states that have also seen
some of the sharpest price declines.
To read the full story, please click here:
http://online.wsj.com/article/SB125211204270688031.html
Low rates keeping homes affordable
Falling interest rates are fueling a rise in home mortgage applications and refinancings in the Inland region,
though experts aren’t yet ready to declare the beleaguered local housing market on the road to full recovery.
To read the full story, please click here:

http://www.pe.com/business/local/stories/PE_Biz_S_mortgages04.38b40b4.html