Fannie Mae and Freddie Mac are about to get tougher on banks and other lenders that cut corners when originating mortgages and try to sell them to the government-sponsored enterprises.

For the first time ever, the GSEs are creating formal programs to flag defective loans and assess risks in lenders' mortgage processes. Lenders will be graded and receive feedback on areas such as underwriting, quality control and governance and, if loans are defective, the GSEs will require lenders to immediately repurchase them. In the past, it might have taken years for the GSEs to spot defects and force a lender to repurchase a loan.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry