It sounds like you are qualified to purchase a "summer home" if that is what you are asking. If that is what you are asking, let me know how I can assist you in proceeding with your real estate needs. I am licensed in Ohio and Michigan so I can assist you in both states. Let me know what I can do to assist you and have a terrific day.... more
i would strongly suggest you check your credit report and to work with a credit counseling service to clear up your credit report. I would also suggest checking with lenders to see what their input would be--and keep paying your bills on time.... more
One thing that the other answers don't cover is how it is that Fannie/Freddie influence the market and that sounds like the heart of your question.
Fannie/Freddie (the GSE"s) purchase loans made by other lenders, which frees up capital so they can make more loans.
Very few lenders make loans that they hold in their own portfolios anymore.
Since the GSE's are the biggest buyers of mortgage loans, they set the criteria for which they will purchase these loans. In other words, the GSE's can say "we'll buy loans with 80% loan to value, 36% debt ratio, and so on" (these percentages are just for sake of example)
Loans which "conform" to these guidlines are called "conforming loans". However, lenders do have the ability to make loans that don't conform to the Fannie/Freddie guidelines. The banks who do this are called "non conforming lenders" or "portfolio lenders" because when they make these loans, they can't sell them to the GSA"s since they don't meet the guidlines, which means the lender has committed that amount of capital for the life ot fhe loan.
To think of it in greatly simplified terms, think of it like this: Suppose you had a million dollars to lend to people. You could make 10 loans of 100,000 and then you would be "loaned out". But suppose you could make a loan and sell it to someone else who gives you, say, 98,000 back a few days after the closing, you could loan that money again and again and again.
Leading up to the time the real estate bubble burst, there were many other non-conforming lenders because there were many other entities who were purchasing loans on the secondary market who set their own guidelines. Some of these were hedge funds (I believe they invented the "option arm" mortgage), some were insurance companies and other institutional investors.
This started out as a good idea to make loans that don't fit the GSA's guidelines as a conforming loan, but the loan still makes sense. However, over time, the secondary market let the sight of short term profits in MAKING the loan blind them to the long term effects of their ever loosening criteria. In other words, the pendulum had swung too far to the "loose" side.
There are a couple small banks in the area, Croghan Colonial in Fremont, Citizens Bank in Sandusky and First Federal of Defiance (actually and S&L) who will still make their own "portfolio loans" or "non-conforming" loans, but there are darned few of these banks left.
I believe that 5/3 also makes a small number of portfolio loans under their Flex program, but i understand that their loan criteria has tightened with the housing bubble like many others have. You might also try NOIC, I believe they also portfolio a few loans, but I have no idea how many they can handle.
Someone mentioned FHA as an answer, but remember that you can only have 1 FHA mortgage which I believe they want the property to be owner occupied, (mortgage brokers please feel free to correct me on that) and there has been mention in the press that FHA will be tightening soon.
I hope that answers your question.
Please keep me in mind in your search for properties, I specialize in real estate investments.... more