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Article: Freddie Mac rolls out tougher subprime lending standards.(Briefing Book)(Federal Home Loan Mortgage Corp.'s issues new standards)
- Article from:
- Mortgage Banking
- Article date:
- April 1, 2007
CopyrightCOPYRIGHT 2007 Mortgage Bankers Association of America. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Freddie Mac announced it would cease buying subprime mortgages that have a high likelihood of excessive payment shock and possible foreclosure, while the government-sponsored enterprise (GSE) also works to develop model subprime mortgages.
Freddie Mac said it will only buy subprime ARMs--and mortgage-related securities backed by these subprime loans--that qualify borrowers at the fully indexed and fully amortizing rate.
The goal is to protect future borrowers from the payment shock that could occur when their adjustable-rate mortgages increase, said Freddie Mac Chairman and Chief Executive Officer Richard F. Syron.
"Freddie Mac has long played a ...