Underwriting Overlays Remain a Concern, GSEs and Lenders Seen as Sharing the Blame
December 11, 2014
Democrats in Congress and consumer advocates remain concerned about tight underwriting standards for mortgages, particularly due to overlays established by lenders. However, at a hearing this week by a subcommittee of the Senate Committee on Banking, Housing and Urban Affairs, there was a lack of consensus on what causes underwriting overlays. “Instead of matching the creditworthy borrower at the lower end of the distribution with affordable loans, these borrowers are being cut out of the market entirely,” said Sen. Robert Menendez, D-NJ, chairman of the Banking Subcommittee on Housing, Transportation and Community Development. Sen. Elizabeth Warren, D-MA, suggested...
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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