by Tanta on 8/03/2007 02:30:00 PM
Friday, August 03, 2007
Mike Perry, chief executive of mortgage lender IndyMac Bancorp said on Thursday that he got a phone call this week from U.S. Sen. Christopher Dodd, D-Conn., who asked whether Congress can help the U.S. mortgage industry in any way.
"I also have talked to the Chairman of Fannie Mae this morning and have traded calls with the Chairman of Freddie Mac," Perry wrote in a company blog. "Fannie Mae's Chairman (is) telling me that they are 'prepared to step up and help the industry'."
Fannie and Freddie have a Federal charter that requires them to provide liquidity and stability to the mortgage market. However, those organizations made it clear on Friday that any help will be limited.
"Congress is very focused on this issue," Doug Duvall, a spokesman at Freddie Mac, said. "There's a squeeze in the market right now and lenders are tightening their standards. But having a little more prudent underwriting isn't a bad thing. It's important to keep people in their homes and to make sure they buy homes they can afford."
Freddie has pledged to invest $20 billion in new subprime mortgage products, however those loans have to meet much stricter underwriting standards.
Brian Faith, a Fannie Mae spokesman, said the company is "playing an active but prudent role in the effort to stabilize the secondary market."
Fannie has so far refinanced $5.4 billion of formerly subprime mortgages, bought $450 million of state HFA rescue packages and modified terms on more than 20,000 loans, he noted.
"We will continue to work with our lender customers to provide additional liquidity where we can to help stabilize and support the market," Faith added.
However, another person close to Freddie Mac who didn't want to be identified stressed that Fannie and Freddie aren't just going to buy up non-conforming loans to bail out troubled players in the secondary market.
Posted by Tanta on 8/03/2007 02:30:00 PM