Fannie Showing Some Caution on Housing

Fannie Mae does not buy into housing "bust" fears, but its vice president of credit policy is expressing caution about local markets.Speaking at an underwriting conference in Washington, Joseph Biegel said, "It's possible that local housing markets will appreciate more slowly or go negative." He added that some markets "have really inflated, and it's inevitable they will go down." In a speech to the conference, sponsored by the Mortgage Bankers Association of America, he did not single out any geographic areas. (However, over the past few months some housing economists have singled out Austin, Texas, the technology belt in California, and certain regions in New England as areas of concern.) Mr. Biegel also noted that Fannie Mae has reported "hundreds and hundreds" of appraisers to state agencies over the past year because of concerns about their work. Mary Crate, a credit policy manager for Freddie Mac, also spoke at the meeting, noting that the investor is making some underwriting changes to its niche programs, including construction-to-permanent loans. The two government-sponsored enterprises can be found online at http://www.fanniemae.com and http://www.freddiemac.com.