In the mortgage industry, the FCA has been used by the Department of Justice and Department of Housing and Urban Development to punish FHA lenders for sloppy underwriting practices that led to defaults.
JMP said it sounds like “these actions” by the GSEs “primarily targeted nonbank wholesale channel lenders, of which UWM [United Wholesale Mortgage] and HMPT are among the largest.”
Fannie CEO Hugh Frater described the change to DU as “one important step in correcting the housing inequities of the past,” adding that it will create a more inclusive mortgage credit evaluation process.