Wednesday, February 28, 2007

Freddie Mac tightening subprime guidelines

A piece in the Times today about Freddie's tightening of its lending standards and its unwillingness to purchase loans below certain borrower credit limits. Just another chink in the trend we're seeing.

My favorite line from the mortgage guys is, "oh, he/she is just going to refinance anyways." I.e., don't worry that the loan's interest rate goes up to 15% in the second year and there's a balloon payment after year 15. No one ever loses a job or gets sick, ect., ect. that would not allow them to refinance would they, right.

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