Fannie Mae (FNMA)

[Wise Man]

Is the purchase/sale of 2nd-lien mortgages in cash-out refinancings, a new product?
It would need approval, plus publication on the Federal Register for a comment period.
I don't think that it's a new product. Subject to the overall 80% LTV limit (Charter Act: the same Credit Enhancement clause that bars the CRTs) that takes into consideration the first mortgage it emanated from, when it was refinanced, and at the same interest rate.
So, not only mortgage-related but also it copycats the first mortgage.
It would be sold as a Uniform Mortgage-Backed Security (UMBS) like all others.
You may say that it's a new product because it's a new activity. It's the same activity when it was created: refinancing of the mortgage. Same collateral.
What we call "product" is the UMBS.
The same with the sale of RPL bundled into UMBS again. Nowadays RPL sold to GS.

It wouldn't be a good idea to consider it a new product, pricing-wise.

Not a personal loan at a 9.5% rate like the new proposal from Freddie Mac. This case, a new product.



Authorized in the Charter Act: "to lend on the security of a mortgage."
More if we are bound for a Charter-revoked scenario (2011 UST plan).