The current loss-mitigation waterfall has dramatically reduced foreclosure liquidations, suggesting lenders could make more loans to riskier borrowers without increasing expected losses.
Sam Khater, chief economist at Freddie Mac, described the issue as “urgent, but manageable,” an opinion shared by others at the conference hosted by Americatalyst.
A proposal from Freddie Mac to acquire second liens prompted immediate reactions. The GSE rebuts claims that its plan represents “mission creep” or that it would interfere with the existing securitization market for closed-end seconds.