REPORT: Fannie And Freddie Near Deal To Boost Mortgage Lending

From Joe Light at the WSJ: Fannie, Freddie Near Deal That Promises to Boost Mortgage Lending

Mortgage giants Fannie Mae and Freddie Mac , their regulator and lenders are close to an agreement that could greatly expand mortgage credit while helping lenders protect themselves from charges of making bad loans, according to people familiar with the matter.

The new agreement would clarify what mistakes should constitute fraud, giving greater confidence to lenders that they won’t be penalised many years after a loan is made.

Separately, Fannie Mae, Freddie Mac and the FHFA are considering new programs that would allow them to guarantee some mortgages with down payments of as little as 3%.

CR Note: There are two parts: 1) less risk to lenders of being forced to buyback faulty loans, and 2) a lower downpayment in certain circumstances. According to the article the agreement could be announced next week.

More from Calculated Risk:

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at