WaMu, Fannie Form 'Affordable Lending' Alliance

Washington Mutual, Seattle, and Fannie Mae have announced an "affordable lending" alliance designed to boost lending by $85 billion over five years to low- and moderate-income borrowers, minorities, immigrants, and first-time homebuyers.The alliance, which will focus initially on Los Angeles and Dallas, is part of WaMu's $375 billion, 10-year Community Commitment and Fannie Mae's $2 trillion American Dream Commitment to increase homeownership rates by the end of the decade. WaMu will carry out the new effort, partly by offering affordable mortgage products such as the Washington Mutual Community Access program. WaMu said the program is a combination of flexible approval features, including: consideration of alternative credit (with no credit score requirements in some cases); zero-points options on origination fees; 3%-5% downpayment options, with only 1%-3% required from the borrower's own funds; allowance of up to 45% of a borrower's gross income to be used for mortgage payments; and no required cash reserves for single-family residences. The companies can be found online at http://www.wamu.com and http://www.fanniemae.com.