FHFA to ease credit

by Ryan Smith15 May 2014
The director of the Federal Housing Finance Agency announced Tuesday that the agency would work to make credit available to more prospective home buyers.

“Housing finance is such a critical part of the economy," FHFA Director Mel Watt said during a speech at the Brookings Institute. "To stop, or stand in place, is just not an option.”

Watt also refused to weigh in on the current congressional debate over the ultimate fate of Fannie Mae and Freddie Mac.

“Our goals are consistent with operating Fannie and Freddie in the here and the now, and we'll do that until there is legislation passed,” Watt said.

Watt did announce several policy changes aimed at easing the path to home ownership for more borrowers:
  • Fannie and Freddie will still back loans even if the borrower misses two mortgage payments in the first three years after a lender acquires the loan. Right now, Fannie and Freddie can compel the lender to repurchase those loans – a policy which Watt said “undermines the goal of improving access to mortgage credit for creditworthy borrowers.”
  • The agency will not reduce the maximum loan limits for Fannie and Freddie. This is a reversal of the policy of Watt’s predecessor, Acting Director Edward DeMarco, who announced his intent to reduce the loan limits last year.
  • The FHFA will launch a pilot program for foreclosure relief in Detroit. The program would aim to get more relief to homeowners and get foreclosed properties on the market sooner.
 
 

COMMENTS

  • by Mark Jagusiak | 5/15/2014 9:12:21 AM

    Why don't they reverse the reduction of mortgage limits that they just enacted? Don't they realize that when they reduce mortgage limits, housing prices go down? How about changing the uw criteria for acceptance of assets? How about changing the ultra ultra conservative income calculations? How about just getting rid of the CFPB, who shouldn't have their inexperienced noses into underwriting criteria? (QM)

  • by Bob | 5/15/2014 9:19:18 AM

    WOW! An administration bent on regulating even sound business out of business is now hinting relaxed regulation? Doubtful.

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