real-time news and commentary for investors
Friday, Aug 16
Fannie may curb low-down-payment mortgage buys
- Its eye on a recent uptick in low-down-payment mortgages, Fannie Mae (FNMA.OB +8.3%) is considering curbing purchases of mortgages requiring just 3% down. Unlike Freddie Mac (FMCC.OB +7.2%) which stopped buying anything with less than 5% down years ago, Fannie never stopped accepting the paper.
- As the FHA has backed away from the business of late, private mortgage insurers (RDN, MTG) have stepped in, making it possible for lenders to offer reasonably-priced high LTV loans that can be sold to Fannie.
- Fannie doesn't disclose the numbers, but MGIC Investment (MTG) said its 3%-down loans accounted for 5% of business during Q2 ($480M), up from 2.8% a year ago.