As of August 1st, 2008 the new mortgage guidelines will limit the number of properties a borrower can own to four 1-4 unit mortgaged properties. This will include any owner occupied or second homes added to any newly mortgaged property one desires to purchase in the future. Freddie Mac will not count the number of mortgages on a property, first and second mortgages will be counted as one. Formerly investors were allowed to own 10 mortgages properties. The policy change also says “no cash out” on refinanced mortgages.
http://www.mortgagebankers.org/files/News/InternalResource/62086_FreddieMacBulletin,April22,2008.pdf
Will other lenders follow?
They are idiots! This is a time to encourage investors to pick up the slack left by greedy buyers, both investors and non-investors alike.
Leaving the surplus to rot on the streets, with city and state taxes diminishing from lack of payment, is a compounding problem.
Increase the lending requirements, let those who are worthy, and liquid take the surplus off the street.
No wonder they are in the mess they’re in. They cannot see the street view.
Susie
Used to be 4 then went to 10. Now it’s back to 4. Too bad about the cash out refi but that’s been a given that they’d take that away.
Looks like 5 year balloon commercial type loans are the only available route to investors and that only works if you want to flip or never get long term financing. I guess leveraging property anymore doesn’t make sense since there isn’t any appreciation. Cash is and will be king.