Fannie, Freddie 'Pushing Away' Good Loans?

The chairman-elect of the Mortgage Bankers Association has taken Fannie Mae and Freddie Mac to task for "penalizing future borrowers" for the past sins of granting financing to previous borrowers who weren't nearly as deserving. David Kittle, the president of Principle Wholesale Lending, Louisville, Ky., who takes the MBA's reins in October, questioned the need for the government-sponsored enterprises to charge higher fees for loans with smaller downpayments, borrowers with FICO scores between 650 and 680, or on houses located in so-called declining markets. Speaking to reporters at the MBA's National Secondary Market Conference in Boston, Mr. Kittle said, "We're making better loans today than we ever have. So if we're underwriting better, what's the need for the fees?" The MBA officer said the fees are adding $750 to the cost of every $100,000 borrowed, so borrowers who care about cash are opting for loans insured by the Federal Housing Administration. "A FICO score of 660 with 10% down is a good loan, but they've pushed that entire market to the FHA," he said of the GSEs.