A borrower’s liquidity situation seems to be a better indicator of potential default than LTV or DTI ratios, according to the JPMorgan Chase Institute. The institute suggests that the use of emergency mortgage reserve accounts could help alter the DTI ratio standards for qualified mortgages.
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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