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Volume 29 - Number 25

June 22, 2012

Trade Groups Urge Finance Agency to Push GSEs To Develop More Transparent Buyback Policies

The Federal Housing Finance Agency should address Fannie Mae and Freddie Mac’s representation and warranties repurchase demands with an eye toward making the two government-sponsored enterprises’ buyback policies more transparent, industry groups say. The volume of repurchase demands by the GSEs continues at “unprecedented levels” as Fannie and Freddie made nearly $100 billion in repurchase demands over the past three years, the Mortgage Bankers Association said in a comment letter on the FHFA’s strategy for GSE conservatorship. “MBA supports lender reps and warrants as an effective method of...

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Poll

What is it going to take to convince lenders to loosen the credit box (i.e., remove underwriting overlays)?

The recent rep and warranty changes announced by the Federal Housing Finance Agency should go a long way in protecting lenders from future buybacks and help expand mortgage credit.
There won’t be any significant elimination of underwriting overlays until the government stops seeking huge mortgage-related penalties and settlements from lenders.
There shouldn’t be any expansion of the mortgage credit box since looser underwriting is what caused the recent mortgage crisis.

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