LANHAM, MARYLAND – The President of the National Association of Real Estate Brokers (NAREB), Donnell Spivey, commended recent action taken by the Federal Housing Finance Agency (FHFA) to expand homeownership for more Americans. Under the leadership of FHFA Director Mel Watt, on October 21, 2014, the agency announced that Fannie Mae and Freddie Mac, along with lenders, have reached an agreement to ease the representation and warranty requirements for lenders that sell mortgage loans to Fannie Mae and Freddie Mac.
Spivey says, “Action taken by the FHFA this week removes a significant barrier to homeownership. FHFA Director Watt is commended for the vision and leadership he is bringing to removing the hurdles that have precluded many consumers from buying homes.”
After the mortgage collapse, both Fannie and Freddie exercised their representation and warranty requirements to force lenders to repurchase loans. Lenders complained that the representation and warranty rules were unclear and not being applied uniformly. As a consequence, lenders instituted underwriting guidelines, which are more stringent than Fannie/Freddie requirements, in order to protect themselves.
Director Watt also confirmed that Fannie Mae and Freddie Mac will begin accepting mortgages with 3% down payment.
Spivey also notes, “Since 2008, we have seen the mortgage market constrict and limit financing to only the most qualified borrowers. The impact of these restrictive lending policies have had a disparate impact on communities of color and blocked the ability to restore lost wealth to those who were most impacted by the housing crash. Our communities need some good news. This is good news!”
Director Watt’s leadership position in the direction of the mortgage market is needed and timely. This is the first announcement in many years that will actually move the needle toward expanding homeownership since the mortgage crisis of 2009.
The National Association of Real Estate Brokers, founded in 1947, is the oldest minority real estate trade association in America. It was formed out of a need to secure the right to equal housing opportunities regardless of race, creed, or color.