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.

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Comments (2)
  • rambler1
    , contributor
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    About time someone comes to their senses.
    16 Aug 2013, 11:17 AM Reply Like
  • Bbauch71
    , contributor
    Comment (1) | Send Message
     
    more and more private mortgage ins coming next year in a heavy purchase market. Fannie and Freddie will continue to prosper as well as mi companies since the book of business is so darn clean. fha wants less and less market share based off recent decisions to increase ufmip, etc.. mtg will continue to post profits this year and next year leading to a much healthier cash position. my expectations are for mtg to be around 14 or 15 this time next year.
    16 Aug 2013, 12:46 PM Reply Like
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