Fannie Spurns NJ, NM, IL High-Cost Loans

Fannie Mae has announced that it will not purchase "high-cost" subprime loans from New Jersey, New Mexico, and Illinois, which are implementing new anti-predatory-lending laws.Effective Nov. 27, mortgage loans "may not be delivered to us if they qualify as 'high-cost home loans' under the New Jersey law," the giant secondary-market agency told lenders. Fannie Mae also noted that the treatment of home improvement loans, manufactured home loans, and refinanced loans that are classified as "covered loans" under the New Jersey law also creates "potential legal and business risks" that need to be monitored. "If necessary, we may announce restrictions on their delivery in the future," Fannie Mae said. The government-sponsored enterprise issued similar instructions in regard to the Illinois and New Mexico predatory lending laws that go into effect Jan. 1. Fannie Mae can be found online at http://www.fanniemae.com.