(snip)"Those who made loans and expected to sell them quickly did not care much about assuring that the loans would be repaid. It turns out that the financial wizards who made it easy to transfer risk also assured that more risks would be taken. They produced innovations like Nina loans, which, Mr. Piszel said, “found their way into prime space.”
Nina loans?
The abbreviation stands for “No income, no assets.” It does not mean the loans went to people without either assets or income, only that the borrowers were not asked if they had either. I had known about “stated income” loans — also known as “liars’ loans” — in which the bank took a borrower’s word for how much he earned. But I had not realized you could borrow money without even being asked about your income.
Starting this month, Freddie won’t guarantee such loans, which seem to default more often than other loans.
Each week seems to turn up more evidence of just how wide open the credit markets were, particularly for mortgages. Freddie Mac reports that two-thirds of the reserves it has set aside for bad loans come from 2006 and 2007 loans.
Freddie’s principal business is buying loans, guaranteeing them and then selling securities backed by those loans. It is the only link in the chain that has any reason to care about credit quality, and it appears that it did not care very much.
A kinder way to look at it is that competition forced it to lower its standards. Either way, Freddie this week released data showing how its standards had eroded. None of the loans on its books from 2003 or earlier call for payments of interest only. Almost a quarter of the loans it bought this year had that characteristic."(snip)
from
basically, in the current climate of fear on the part of mortgage lenders, no guarantee by Fannie / Freddie equals no loan approval by the mortgage lender.



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I believe you Dottie and you have my support


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