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:
- Sunday Night Futures
- Hamilton: “How will Saudi Arabia respond to lower oil prices?”
- Schedule for Week of October 19th
- Unofficial Problem Bank list declines to 426 Institutions
- Bank Failure Friday: NBRS Financial, Rising Sun, Maryland,15th Failure of 2014