The latest moves, while modest, are an indication that some mortgage companies believe the worst home-price declines are over — at least in certain parts of the country — and that prices are likely to stabilize or fall slightly over the coming year.
Some mortgage insurers and lenders are beginning to relax their down-payment requirements, in a sign of increased confidence in the housing market.The changes, which are being done on a market-by-market basis, mean buyers in some parts of the country can now borrow 95% instead of 90% of a property’s value. Until recently, mortgage companies had tighter standards for these markets because of falling home prices.”We are feeling better about the economic condition of the marketplace,” said Michael Zimmerman, senior vice president of investor relations at mortgage insurer MGIC Insurance Corp. Borrowers who want to finance more than 80% of a home’s value must typically purchase mortgage insurance.
By Ruth Simon, Dec. 19, 2009 WSJ

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