Investors Not Happy With 4-Loan Limit
Many real estate investors, including myself, are not happy about the new Fannie Mae-Freddie Mac policy that limits to four the number of real estate loans that can be held by a single person.
The rule, which took effect Dec. 1, prohibits an investor from obtaining even a fifth mortgage no matter how much money is put down or how much income documentation is provided. It offers no exceptions for assets or history of success as a real estate investor.
My feeling is that the regulation pendulum has swung too far and that actions like this will only continue to put a damper on the economic recovery. I have never been a fan of policies that do not consider all factors.
As always, where there is a will, there is a way. Some investors are trying to work around the rule by partnering with other investors to either buy in cash or use their eligibility to borrow. Also, portfolio lenders who will ultimately hold the paper and not sell it on the secondary market will become increasingly important to the investor.
The rule, which took effect Dec. 1, prohibits an investor from obtaining even a fifth mortgage no matter how much money is put down or how much income documentation is provided. It offers no exceptions for assets or history of success as a real estate investor.
My feeling is that the regulation pendulum has swung too far and that actions like this will only continue to put a damper on the economic recovery. I have never been a fan of policies that do not consider all factors.
As always, where there is a will, there is a way. Some investors are trying to work around the rule by partnering with other investors to either buy in cash or use their eligibility to borrow. Also, portfolio lenders who will ultimately hold the paper and not sell it on the secondary market will become increasingly important to the investor.
Labels: Finance, Mortgages, Real Estate Investing
posted by Steve Hardy at
11:21 AM
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