Homeport Mortgage - Marietta Mortgage and Home Loan

A blunder by student lender Sallie Mae briefly trashed the credit scores of hundreds of thousands of unwitting borrowers who signed up for the company's graduated-payment loans.

The loans allow borrowers to make smaller payments, sometimes covering only the interest owed, for a few years before increasing to full payments. But within the past week, Sallie Mae began reporting the loans to credit bureau Equifax as essentially delinquent, sending borrowers' scores plunging.

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The Economic Stimulus Act of 2008 was signed into law on February 13, 2008. This broad package provides a temporary increase to the existing Government Sponsored Enterprises loan limits. Fannie Mae®, Freddie Mac® and FHA are allowed to purchase or insure mortgages larger than $417,000, the current limit for conforming loans. This new law temporarily increases the conforming loan amount to as high as $729,750 in specific geographical areas through December 31, 2008.

Guideline changes:

• LTVs greater than 95% require a minimum credit score of 680. In some areas 100% loans will not be insured.
• LTVs 95% or less require a minimum credit score of 620.
• Loans with nontraditional credit require a manual underwrite and are limited to a maximum LTV of 95%.
• Primary residence cash-out refinances require a minimum credit score of 680; and the maximum LTV is 90%.
• Cash-out refinances of investment property loans are ineligible.
• Loans with potential negative amortization, including Pay Option ARMs, are ineligible.
• Borrowers with credit scores below 575 will be ineligible.
• Investor Loans will require larger minimum down payments - 2 to 4 unit purchase will require 10% down payment and 75 large metropolitan markets (including some area in Metro Atlanta) will require a 15% minimum down payment.

The Department of Housing and Urban Development expects to issue the new loan limits for Fannie Mae, Freddie Mac and Federal Housing Administration loans by March 7, sources have told NMN's Brian Collins. Congress raised the loan limits as part of the economic stimulus bill that President Bush signed on Feb. 13. Lenders are waiting for HUD to compute the new loan limits, which are based on 125% of median home prices, with a $729,750 cap.

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