The jump in refinance business, and a shift from cash-out to rate-term transactions, changed the credit-risk profile for Fannie and Freddie in the fourth quarter.

The quality control team at Fannie Mae identified “red flags” that could indicate borrowers have mischaracterized whether they’re seeking a mortgage for a primary residence or for a second home or investment property.

Six of the top 10 significant defects in loans acquired by Fannie Mae in the first quarter of this year weren’t on the list in the last quarter of 2023. Income calculation, though remained at the top of the list.

Sellers to the GSEs sold a larger share of new single-family mortgages with lower credit scores in the third quarter of 2024. But they also in-creased deliveries of mortgages with lower loan-to-value ratios. (Includes two data tables.)

Purchase mortgages continued to dominate deliveries to the GSEs in the second quarter and the share of purchase mortgages with credit scores of 740 or above increased compared with the first quarter. (Includes two data tables.)

Defects related to liabilities on student loans, income/employment verification and the appraisal process topped the list of items Fannie warns lenders to keep alert for.

The share of higher-risk lending going to the GSEs expanded slightly in the first quarter, but high-credit score mortgages continued to dominate business at Fannie Mae and Freddie Mac. (Includes two data tables.)

New research showed that media coverage of home prices helps boost home price growth. This appears to be true at both the state and city level.

Research shows that minority homebuyers are more likely to be approved for a loan if their loan officer is a Democrat.

Although almost all of the cost of funding a loan through MBS is passed through to consumers, borrowers only see about 40% of the “cost” of a specified pool pay-up.