Fannie and Freddie miss the goals – let’s just change them!
by Tom on November 3, 2009
in Market Musings, banks
Now this makes me really feel good about Fannie and Freddie:
- They have and have had for a while, goals for loans to low and moderate portions of the country.
- They aren’t meeting them.
So, what do they do, attempt to do something to change their ability to meet them? Nope, they just change the goals!
Do you think your boss would let you do that?
Tom Vanderwell
The Federal Housing Finance Agency (FHFA) will adjust its target goals for facilitating mortgage origination for low- and moderate-income individuals after the government-sponsored enterprises (GSEs) missed a key loan-purchase goal for originations to low- and moderate-income borrowers.FHFA said it plans to lower recommended loan purchase goals for Fannie Mae (FNM: 1.15 +11.65%) and Freddie Mac (FRE: 1.24 +7.83%), according to FHFA’s annual housing report.
Fannie Mae and Freddie Mac have a mandate to purchase mortgages originated to three groups of disadvantaged borrowers.
Low- and moderate-income borrowers are households with incomes less than or equal to area median income (AMI). Underserved areas include dwelling units in metropolitan census tracts with tract median family income less than or equal to 90% of AMI, or minority population of at least 30% and tract median family income less than or equal to 120% of AMI. Special affordable households are those with income less than or equal to 60% of AMI or less than or equal to 80% of AMI and living in low-income areas.
