Fannie Mae deems Denver a "Declining Market"

The following is an excerpt from the Denver Post article Fannie Mae deems Denver a "Declining Market" by By Aldo Svaldi

Experts say the designation as a declining market could put off a recovery in housing by making it more difficult for some people to get mortgages.

Fannie Mae and its brother agency Freddie Mac have relied on appraisers to determine if a home was in an area with declining values.

Too many appraisers, under pressure to not derail a purchase, were marking the "stable" box instead of the one that said "declining," said Wolfe, who works with Freddie Mac on appraisal-fraud cases.

Appraisers also have failed to properly account for concessions from sellers, which inflate the value of a home.

Under pressure from rising defaults and needing to raise more capital, Fannie Mae has tightened its standards, and Freddie Mac is expected to do the same.

"We need to conservatively manage our business and risks through prudent pricing and underwriting in order to provide sustainable liquidity to our lender customers and stability to the markets," Fannie Mae spokesman Brian Faith said last week in a statement.

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Additional Fannie Mae "Declining Market" Resources:

Announcement 07-22, Maximum Financing in Declining Markets
(.pdf, 166K, 3 pages)
Frequently Asked Questions (Announcement 07-22)
(.pdf, 43K, 4 pages)
Announcement 07-11, Collateral Valuation Practices and Declining Markets
(.pdf, 114K, 5 pages)
Frequently Asked Questions (Announcement 07-11)
(.pdf, 34K, 4 pages)