Both the new regulator for
Fannie Mae and Freddie Mac, as well as the secretary of Housing and Urban
Development, announced they would shift strategies by making credit more
available to homeowners.
Federal Housing Finance Agency (FHFA) Director Mel Watt, who recently took over the job of regulator for the mortgage giants, said in his first public comments that he would not lower the maximum loan limits for Fannie Mae and Freddie Mac, which currently stand at $417,000 in most markets. Watt's predecessor, Edward DeMarco, had contemplated the move as a way to shrink Fannie and Freddie's footprint in the mortgage market.
Watt, a former North Carolina congressman, also said he would try to alleviate some of the uncertainty banks face in dealing with Fannie and Freddie.
"I know that repurchase risk remains a top concern for the mortgage industry. Lenders believe that too much uncertainty still exists in this area for them to ease their credit overlays. Ultimately, this undermines the goal of improving access to mortgage credit for creditworthy borrowers," he said.
In another move to open up credit to first-time homebuyers
specifically, HUD Secretary Shaun Donovan announced a new four-year pilot
program at the Federal Housing Administration (FHA) starting this fall. The FHA
is the government mortgage insurer for low down payment loans.
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