Regulator Extends Greater Shield to Lenders on Mortgage ‘Put-Backs’

Fannie Mae and Freddie Mac will extend new waivers to lenders allowing them to avoid demands that have resulted in billions of dollars of so-called put-backs, in which banks are forced to repurchase defective mortgages sold to the loan giants.

The changes are significant because some industry analysts and economists have said they could lay the groundwork for lenders to relax credit standards. Lenders and policy makers have faulted ambiguous rules around mortgage put-backs for lending standards that they say are unnecessarily rigid.

In bulletins published Monday, the companies said they were announcing the policy changes at the direction of their regulator, the Federal Housing Finance Agency.

WSJ

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