Edward DeMarco, acting director of the Federal Housing Finance Agency, said Monday that Fannie Mae and Freddie Mac will launch a new representation and warranty framework that will ease repurchase obligations on lenders after borrowers build a history of on-time payments, between 30 to 120 days after loan purchase.
Lenders participating in streamlined refinance programs, including HARP, will be eligible for relief after an acceptable payment history of only 12 months following the acquisition date.
Freddie and Fannie will evaluate loans within consistent timelines and promise a more transparent appeals process for lenders to appeal repurchases requests, DeMarco said. The changes will result in better quality originations and underwriting which will ultimately protect the enterprises from substandard loans and future losses, he said.
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