Fannie Mae-No Politics (FNMA)

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Federal Housing Finance Agency Unveils Plan to Loosen Mortgage Rules

By DIONNE SEARCEY and PETER EAVIS
October 20, 2014

A federal housing regulator on Monday announced a plan that could ease tight credit and allow more people to qualify for mortgages in an attempt to get the nation’s housing market back on track.

The plan, announced at a convention of mortgage bankers, includes offering reassurances to lenders that fear they could suffer unpredictable losses on the loans they sell to the government. Separately, plans are in motion to set up programs for borrowers to receive government-backed loans with much smaller down payments than are now required.

“We know that access to credit remains tight for many borrowers, and we are also working to address this issue in a responsible and thoughtful manner,” said Melvin Watt, director of the Federal Housing Finance Agency, which regulates the mortgage giants Fannie Mae and Freddie Mac.

The move in large part is intended to reassure banks that have had to pay tens of billions of dollars to settle legal cases in the wake of the housing crisis and buy back bad loans sold to Fannie and Freddie. To avoid having to make those payments again, many lenders now demand borrowers meet stricter requirements for loans known in the industry as overlays.

http://mobile.nytimes.com/2014/10/19/us/life-in-quarantine-for-ebola-exposure-21-days-of-fear-and-loathing.html