Criteria
The Office of Federal Housing Enterprise Oversight (OFHEO) set the criteria on what constitutes a conforming loan limit that Fannie Mae and Freddie Mac can buy. Criteria include debt-to-income ratio limits and documentation requirements. The maximum loan amount is set based on the October-to-October changes in median home price, above which a mortgage is considered a jumbo loan, and typically has higher rates associated with it. This is because both Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market, making the demand for a non-conforming loan much less. By virtue of the laws of supply and demand, then, it is harder for lenders to sell the loans, thus it would cost more to the consumers (typically 1/4 to 1/2 of a percent.)
Read more about this topic: Conforming Loan
Famous quotes containing the word criteria:
“Every sign is subject to the criteria of ideological evaluation.... The domain of ideology coincides with the domain of signs. They equate with one another. Wherever a sign is present, ideology is present, too. Everything ideological possesses semiotic value.”
—V.N. (Valintin Nikolaevic)
“The Hacker Ethic: Access to computers—and anything which might teach you something about the way the world works—should be unlimited and total.
Always yield to the Hands-On Imperative!
All information should be free.
Mistrust authority—promote decentralization.
Hackers should be judged by their hacking, not bogus criteria such as degrees, age, race, or position.
You can create art and beauty on a computer.
Computers can change your life for the better.”
—Steven Levy, U.S. writer. Hackers, ch. 2, “The Hacker Ethic,” pp. 27-33, Anchor Press, Doubleday (1984)
“There are ... two minimum conditions necessary and sufficient for the existence of a legal system. On the one hand those rules of behavior which are valid according to the system’s ultimate criteria of validity must be generally obeyed, and on the other hand, its rules of recognition specifying the criteria of legal validity and its rules of change and adjudication must be effectively accepted as common public standards of official behavior by its officials.”
—H.L.A. (Herbert Lionel Adolphus)