September 30, 1999
Fannie Unveils ‘Timely Pay’ Mortgage
Fannie Mae has announced a new product aimed at borrowers with slightly impaired credit who do not qualify for a lower-cost conventional mortgage. Under the Timely Payment Rewards mortgage, borrowers who qualify will be able to obtain a mortgage rate as much as 2% lower than what credit-impaired borrowers typically pay, and will be guaranteed a mortgage rate reduction of 1% after 24 monthly payments without a delinquency. “Through dramatic improvements in our risk-assessment technology, which enables us to more precisely identify a borrower's risk of defaulting on his or her home, we can say ‘yes’ to more borrowers and extend our service to them at lower costs,” Fannie Mae chairman and CEO Franklin D. Raines said at a news conference. (Mr. Raines also announced a new Fannie Mae Foundation educational campaign to inform consumers about the role credit plays in the homebuying process.) Under the new program, a borrower with slightly impaired credit may be eligible for a 30-year, fixed-rate $100,000 mortgage at an initial interest rate of 9.5% and a monthly payment of $841, compared with an average interest rate of 11.5% and a monthly payment of $990 for a loan originated in the subprime market, Fannie Mae said.
Interesting this has not been buried. Where is Sandy Berger when you need him Bill?