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US unveils plan to loosen mortgage rules

To reassure mortgage lenders, govt will relax terms of its bad loans buy-back policy

Published Tue, Oct 21, 2014 · 09:50 PM
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New York

FOR years, politicians, housing advocates and potential homebuyers have complained that tight credit policies after the housing market crash have kept too many deserving people from qualifying for mortgages.

Now the government is taking steps that it says it hopes will allow more first-time buyers and lower and middle-income Americans to get home loans at low rates.

On Monday, Melvin L Watt, the nation's chief housing regulator, announced a programme offering more reassurances to mortgage banks that fear they could suffer unpredictable losses on the loans they sell to the government.

Separately, he disclosed that efforts are underway to allow borrowers to receive government-backed loans with much smaller down payments than are now required. But contrary to early expectations, he offered few details on such plans. "We know that access to credit remains tight for many borrowers, and we are also working to address this issue in a responsible and thoughtful manner," said Mr Watt, director of the…

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