Federal Government May Help Loosen Mortgage Rules
Washington, DC, May 14, 2014 -- The federal government may be backing away from recent efforts to tighten mortgage lending standards by requiring higher downpayments for certain kinds of loans, according to a story in the Wall Street Journal.
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Mel Watt, the new overseer of Fannie Mae and Freddie Mac, said the mortgage giants should focus on making more credit available to homeowners. Fannie and Freddie and federal agencies continue to back most new mortgages.
Six agencies, including Fannie and Freddie, are soon expected to finalize new rules for mortgages that are packaged into securities by private investors, the Journal reported. Those rules, the Journal said, back away from the higher downpayments.
There have been recent signs that home sales and construction are slowing down and officials such as Fed Chair Janet Yellen have noted that housing has been a drag on economic recovery.