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.)
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.
Loans delivered to Fannie Mae and Freddie Mac in the fourth quarter of 2023 move towards lower LTV ratios and higher FICO scores as volume plummets. (Includes two data tables.)
Lenders need specific plans for outreach to borrowers that are Black, indigenous and people of color, according to industry participants. Focusing on the borrowers can be difficult but will pay off, the industry participants added.
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