Rick Sharga: Is this the end of the housing recovery?

Rick Sharga: Is this the end of the housing recovery?

Maybe it wasn’t the snow after all

Stewart Information Services 1Q earnings suffer from mortgage reductions

Posts net loss of $12.1 million

New home sales plummet 14.5% in March

Spring buying season off with a whimper

Regulators look to exclude GSEs from mortgage risk-retention rule

/ Print / Reprints /
| Share More
/ Text Size+
Fannie Mae and Freddie Mac should be exempt from upcoming risk-retention rules while in conservatorship, a source familiar with the matter said Wednesday. The Dodd-Frank Act requires federal banking regulators to set a new qualified residential mortgage standard. Lenders will be required to retain 5% of the credit risk on any mortgages written outside of these guidelines. A source at one banking regulator said the latest word is that Fannie and Freddie would not have to retain this risk as long as they remain in conservatorship. How long that will be is up in the air. The two companies are still experiencing losses, and the recent report to Congress from the Treasury Department urged winding down these companies steadily over the next five to seven years. While Fannie and Freddie are not lenders, they provide guidance on what loans they will finance as investors. Currently, Fannie, Freddie or the Federal Housing Administration back more than 95% of all mortgages being written in the U.S. One possible threshold for a QRM will be the down payment. Regulators are currently mulling a possible 20% down payment standard for these loans, meaning that for any loans made with less than 20% down, banks are required to retain the risk. Regulators are still hammering out the details of the QRM rules. Sources say the agencies are shooting to get the proposal out by the April 8 deadline set by the Dodd-Frank Act. Write to Jon Prior. Follow him on Twitter: @JonAPrior

Recent Articles by Jon Prior

Comments powered by Disqus