Two federal agencies with far-reaching influence over the mortgage market are working on a problem that could affect the ability of many consumers to obtain a home loan: How to encourage private lenders to ease up on their underwriting restrictions that go beyond what the agencies themselves require for mortgage approvals. Both the Federal Housing Finance Agency, which oversees giant investors Fannie Mae and Freddie Mac, and the Federal Housing Administration, which runs the low-down-payment FHA program, are considering steps they might take to persuade lenders to open the mortgage spigots a little wider. Bottom line: Lenders say they could loosen up a little on underwriting when federal agencies ease their buyback demands. Since the two top agencies are trying to figure how to do this, home buyers might see slightly less punitive “overlay” fees and underwriting later in the year. Don’t hold your breath, but it could happen and it just might help you get approved for a mortgage.
– LA Times