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Volume 10 - Number 13

June 24, 2011

Downloads Available: GSE Debt Activity 1Q11


GSE Debt Issuance Drops Overall in 1Q11

Debt issuance for Fannie Mae, Freddie Mac and the Federal Home Loan Banks declined during the first three months of 2011, while Freddie recorded an increase in new debt in the first quarter.

The GSEs collectively issued $707.6 billion in new debt during the first quarter, a 9.9 percent decline from the previous quarter, while total GSE debt outstanding at $2.222 trillion declined 1.8 percent from the previous quarter.

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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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