Fannie and Freddie’s loosening of their grip on the FICO scoring model could enable borrowers unable to qualify for a mortgage overcome some hurdles in their current credit reports.
Now comes word that Fannie/Freddie and mortgage lenders are close to an agreement that could lower those restrictions and open up credit to borrowers who have had a tough time getting approved,
The FHFA is currently testing a program in Detroit where Fannie and Freddie would, in partnership with nonprofit companies, lower principal on homes in some of the hardest-hit communities.
Mortgage availability increased in January, bankers say, but while credit is tightening for most home buyers, lenders are loosening terms for jumbo loans. The current conforming loan limit for a single-family home is $417,000 for all states, except for Hawaii and Alaska, where it is $625,500.
More than 123,000 reductions in second liens have been completed through November, according to the overall update for the Home Affordable Modification Program (HAMP), the Obama Administration’s primary anti-foreclosure effort since 2009 which has been widely criticized for its under-performance.
Congressman Mel Watt, the incoming director of the Federal Housing Finance Agency, the independent regulatory over Fannie and Freddie, has said he plans to delay the fee increases announced on Dec. 9 by the current FHFA director, Edward DeMarco. Such fee increases are typically passed on to borrowers in the form of higher interest rates.
Fannie and Freddie’s regulator, the Federal Housing Finance Agency, is moving forward with plans to scale back on multi-family exposure. Fannie and Freddie back about 45 percent of the apartment-building market.
Average fixed mortgage rates edged higher this week for the first time in three weeks in the wake of positive economic data, but remain low enough to attract borrowers seeking to purchase a home or refinance.
The Federal Housing Finance Agency, the regulator over Fannie Mae and Freddie Mac, said it has ordered the two government-subsidized companies to prohibit mortgage servicers from being reimbursed for expenses associated with lender-placed reinsurance arrangements.
JPMorgan Chase will pay $5.1 billion to settle allegations it violated federal and state securities laws by misleading mortgage-finance giants Fannie Mae and Freddie Mac regarding the quality of residential mortgages.