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Volume 10 - Number 10

May 13, 2011

Downloads Available: GSE Earnings 1Q11


Freddie Profits, Fannie Loses in 1Q Earnings

The two sibling GSEs experienced a wildly divergent earnings period during the first quarter of 2011 as Freddie Mac posted its first quarterly gain in two years while big sister Fannie Mae announced losses that drove it even deeper into the red. [Includes one data chart.]

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This biweekly covers the housing-related government-sponsored enterprises with experienced, expert analysis.

 

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Are current mortgage underwriting standards too tough?

Yes, they don’t reflect current market conditions and need to be adjusted to allow borrowers with below 700 FICO scores and smaller downpayments to qualify for mortgages.
Yes, and something needs to be done to significantly reduce repurchase or buyback risk so that lenders don’t apply even tougher underwriting overlays.
No, the standards are appropriate given current risks and the major default problems the mortgage market has experienced over the past several years.

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