“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.
The director of the Federal Housing Finance Agency announced Tuesday that the agency would work to make credit available to more prospective home buyers.