Regulator FHFA to give banks clarity on mortgage buybacks

The regulator for Fannie Mae and Freddie Mac said on Monday it would give banks more clarity on which type of mortgage loans they would be required to buy back if the loan sours. Government-controlled Fannie Mae and Freddie Mac will review the quality of the mortgage shortly after the loan has been sold rather than after it has defaulted or a borrower has missed payments, the Federal Housing Finance Agency (FHFA) said. The regulator said it would also give banks more certainty that they would not have to repurchase loans that performed well over a period of time such as three years. “This is an important step in improving upon past business practices,” the regulator’s acting director, Edward DeMarco, said in remarks delivered at a conference in North Carolina.

Reuters

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