Smaller Down Payments/Easier Loan Qualifications Change Mortgage Market, Business and Industry Trends Analysis

In response to the recession of 2008-09 as well as stricter banking regulations, mortgage lenders tightened their requirements for down payments and generally made loans much harder to get in most of the world.  In the U.S., borrowers were required to put 20% down, or the lending banks would have to hold 5% of the loan’s risk once it was packaged and sold to investors.  However, by early 2014, home sales were once again slowing, and lender regulating agencies including Fannie Mae and Freddie Mac reduced their down payment requirements with the goal of stimulating borrowing.  Meanwhile, private mortgage lenders…

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