Newspaper article THE JOURNAL RECORD

Fannie Mae Changing Rules to Make Refinancing Easier

Newspaper article THE JOURNAL RECORD

Fannie Mae Changing Rules to Make Refinancing Easier

Article excerpt

WASHINGTON (AP) - The nation's largest buyer of home mortgages said Wednesday it is changing its rules to make it easier and cheaper for homeowners to refinance their mortgages.

The Federal National Mortgage Association, known as Fannie Mae, said the changes would offer lower closing costs and faster approval to homeowners replacing fixed- rate or adjustable-rate mortgages with new fixed-rate loans.

Fannie Mae, a congressionally chartered, shareholder-owned company, along with the Federal Home Loan Mortgage Corp. (Freddie Mac), provide money for home buyers by purchasing mortgages from lenders and packaging them into securities for sale to investors.

Mortgage lenders expect a surge in refinancing this summer because fixed-rate mortgages have fallen by about 1 1/4 percentage points since March and are expected to fall by another quarter-point by fall.

Fannie Mae helps finance one of every eight mortgages.

Fixed rates are below 10 percent for the first time in more than a year. One-year adjustable rates have edged down in recent months, but not by as much, and still are about a percentage point higher than a year ago.

Fannie Mae chief economist David W. Berson said he expects roughly 300,000 homeowners to refinance in the July-September quarter. He said about $90 billion in fixed-rate mortgages would be written in the quarter and between 25 percent to 35 percent those likely would be refinancings.

Much of this summer's refinancing activity will come from homeowners who took out adjustable-rate mortgages and have seen their rates and monthly payments go up. …

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