Investors still pressed for cash

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Eight months after Fannie Mae announced that it would loosen mortgage guidelines for investors, who, the mortgage giant said, “play a key role in the housing recovery,” only 8 percent of homebuyers in August identified as such. In August 2008, investors accounted for 21 percent. The shift, some industry professionals say, is indicative of Fannie’s dwindling influence over other banks and lenders who are still wary of the risks involved if someone who originally intended to flip the loan ends up in default. Most banks are willing to loan to investors who own four or fewer properties, while Fannie stands virtually alone as being willing to guarantee loans to investors who own up to 10. This has left investors hard-pressed for cash in a market where a large supply of bank-owned properties — some say up to 7 million homes — is set to hit the market in the next few years. [American Banker via Condo Vultures]

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