The group proposes to lessen the risk to taxpayers through guarantee fees for mortgage-backed securities and by requiring mortgage insurance where the borrower is financing 80% or more of the loan value.
Value is hurting ratios, and this in turn is disqualifying borrowers from approval based on loan to value (LTV).
And about another 8 million have a mortgage with a loan to value ratio between 95 to 100%.
When you roll in the insurance fee into the loan balance you have a loan to value ratio that starts at over 98%.
After a deed-in-lieu of foreclosure, preforeclosure sale, or short sale, there is a mandatory waiting period of two years for a loan with an 80% maximum LTV (loan-to-value ratio), or four years for a loan with a 90% LTV.
In addition, it ensures that those who come here are those who either have enough income to pay for entry or can prove to private parties that they expect enough income to pay off a loan of equal value.
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Meanwhile, to get a bank loan, one must put up 150% to 200% of the face value of the loan in collateral and get three guarantors with good incomes.
Meanwhile, to get a bank loan, one must put up 150% -200% of the face value of the loan in collateral, plus get three guarantors with good incomes.
While acknowledging the risks, the banks defend their exposure saying they have low loan-to-value ratios.
For example, the Fed could pop housing bubbles by imposing a maximum loan-to-value ratio for mortgages.
The loan-to-value ratio of Zions' commercial real estate portfolio is low at 62%.
The percentage of riskier securities like subprime mortgages and mortgages with a loan-to-value ratio of greater than 90% skyrocketed.
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Under the Obama plan there is no upper limit on this loan-to-value ratio.
Consider this one: The loan portfolios and the value of collateral held to cover lost loans continue to lose value.
The graph below shows the loan-to-value (LTV) distribution for homeowners with a mortgage nationwide in 2012 Q4 vs. 2011 Q4.
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The biggest success rate occurs when the loan-to-value ratio is below 66%, a condition that rules out recent subprime borrowers.
"Funding for Lending (FLS) should make this easier this year, resulting in more choice at higher loan-to-value deals and better rates, " he added.
The coming change will allow all borrowers with loans backed by the company, regardless of their loan-to-value ratio, to benefit from the streamlined program.
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Many of these investors are able to pay a price closer to the loan's face value than bigger private-equity firms are willing to do.
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Will there be certain debt-to-income ratio or loan-to-value ratio thresholds imposed?
This can be seen by comparing the median loan-to-value ratio of underwater borrowers by age, which is lower in the younger age brackets (see Figure 1).
Plenty of those flats were bought with credit but loan-to-value ratios were, many bankers claim, conservative, while standards are nothing like as loose as in America.
Rics blamed the worsening affordability on the reduction in the loan-to-value ratios lenders were prepared to offer first-time buyers, and the "continued burden" of stamp duty and professional fees.
On top of Mr Flaherty's measures, the Office of the Superintendent of Financial Institutions, Canada's banking regulator, slapped a loan-to-value limit of 65% on borrowing against home equity.
The previous maximum loan-to-value ratio of 125% has been eliminated.
Last month the Welsh government announced it was dropping its NewBuy scheme which was designed to help people get high loan-to-value mortgages and would have supported the creation of 3, 000 homes.
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With borrowing rates so high, loan-to-value ratios on houses can be twice as much as a home's market value, whereas in a more balanced market they would be at 75%.
While the rate of negative equity is comparable between the two sets of borrowers, the delinquency rate and loan-to-value ratios are substantially lower for borrowers who purchased homes in 2010 (see Figure 2).
The substantial drop in delinquency rate and loan-to-value ratio for borrowers who purchased homes in the years after 2007 is likely a product of the tightened lending standards implemented in the post-bubble housing market.
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