In December 2014, Fannie Mae and Freddie Mac announced that they would start lending money to people who can put as little as 3% down on a home. The initiative, which was suspended and then reinstated, is meant to encourage low-to-moderate income consumers into homeownership and restore a suffering segment of the industry. For the past few years, many buyers were cash investors, buying up homes in distress and selling them for a quick profit, or holding on to them as rental properties. These all cash deals, along with the tighter credit market hurt the mortgage industry.
According to an article in the Chicago Tribune, “as of September 2014, the nation’s homeownership rate had sunk to a 19-year low of 64.4 percent.”
Of course, this move is not without debate. There are plenty of naysayers who believe the 3% initiative edges the industry toward the dangerous lending practices that caused the 2008 foreclosure crisis. However, Fannie Mae and Freddie Mac have assured the industry that they have created safeguards to prevent the same thing from happening.
The primary aim and hope of loosening the belt of lending is to provide a necessary boost to the marketplace and the mortgage service industry. As lending becomes less stringent, the mortgage industry should receive an influx of customers, homeowners with low-down payments and a need for longer mortgages.
As the industry progresses, eCampaignPro offers ways to capitalize and connect with the growing pool of active realtors. Mortgage brokers can benefit from the established network of over 1 million registered real estate agents. Using eCampaignPro’s custom templates for real estate email marketing, mortgage brokers can notify realtors of their services and generate referrals. With eCampaignPro mortgage brokers can do more than just predict an upswing; they can generate activity in the market quickly, and efficiently.