Andrew Ackerman
speaker
348 appearances
7 recordings
1 series
first heard Mar 2019
last heard Aug 2022
Andrew Ackerman’s voice in public audio — every appearance, attributed to the second.
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Appearances
When someone wants to buy a home, they go talk to a lender.
The lender will sort of determine what their debts are, what their income is.
They do this whole underwriting process.
And as part of that process, they're going to look at your student debt.
Up to now, they've assumed that people with these plans pay 1% of the unpaid principal balance, or 12% a year.
But for a certain growing segment of people with student loans, the borrower is paying them back at a slower pace than they originally planned to pay them.
Either they have a deferral, or they are in what's called an income-based repayment plan, which is a pretty fast-growing area of the student loan market.
So for people with high debt loads, that can just kick them out from financing, particularly in the FHA space, where people tend to have more modest incomes.
I talked to somebody in DC who had more than $200,000 in debt.
And right off the bat, the lender's looking at this guy's finances, and they have to assume that he's got a $2,000 plus payment in student loans because he's in an income-based repayment plan.
and the way federal housing administration's regulations have worked up to this point.
The formula changes things by, we're going to look at your actual payment.
We're not going to create a number out of thin air that's 1%.
It's going to be the actual payment or an alternative that's closer to the actual payment.
For the most part, the 1%, a lot of the
industry groups and consumer advocates who were involved in lobbying for this change, they argue that the 1% figure was inflated, that it would lead to inflated DTIs, debt to income ratios for people.
And it was a big roadblock to access to financing for lower income people.
The other important factor is that this is going to help people specifically on income-based repayment plans because their payments are going to be well below the 1%.
And so they will qualify for more house or they'll have an easier time qualifying for an FHA mortgage.
There's some other federally guaranteed loan programs as Fannie and Freddie.
Showing 101–120 of 348 · page 6 of 18
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