A growing share of loans with high debt-to-income ratios and other high risk factors has recently concerned mortgage insurers and prompted a policy change at Fannie Mae.
The trend began last summer as Washington-based Fannie started allowing low-down payment mortgages to borrowers who had DTI ratio’s as high as 50 percent.
Mortgage insurance companies began to notice that too many borrowers were being approved who exhibited additional risks factors such as weak credit scores and inadequate reserves.
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From:: Financing