FHFA Director Announces Changes for Improving Access to Mortgage Loans


In his speech at the Mortgage Bankers Association Convention & Expo, the director of the Federal Housing Finance Agency, Mel Watt, presented the measures which FHFA, Freddie Mac and Fannie Mae plan to adopt in order to improve mortgage credit availability.

He recognized that one of the major issues at present is the fact that mortgage lenders are forced to repurchase loans the two government sponsored enterprises. He said that the life-of-loan exclusions imposed by the Representation and Warranty Framework are designed to protect Fannie Mae and Freddie Mac from fraud and other cases of non-compliance. At the same time, they are open-ended and this makes it difficult for mortgage lenders to predict when these exclusions will be applied.

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The FHFA director announced that the agency and the government sponsored enterprises have reached agreement in principle for the definition and clarification of the life-of-loan exclusions. Mortgage lenders will know exactly what these exclusions are and when they will be applied to loans which have secured repurchase relief. The exclusions will fall into six different categories. The first one will cover misrepresentations, misstatements and omissions. The second one will include data inaccuracies. The third one will be for charter compliance issues. The fourth one will cover first-lien priority and title matters. The fifth one will be for legal compliance violations. The sixth one will include unacceptable mortgage products.

The new definitions of the life-of-loan exclusions will be provided shortly by the two government sponsored enterprises. Watt touched upon the definitions of misrepresentation and data inaccuracies, however. There will have to be a minimum number of loans which have these faults in order for the exclusions to be applied. Additionally, the government sponsored enterprises will have to confirm that the mortgage loan would have not been eligible for purchase in the first place if the information on it had been reported accurately.



Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info

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