Fannie to Offer Alternative to 'Exotics'?

Fannie Mae needs to "do more" so that working families trying to afford a home have an alternative to exotic mortgages, according to the mortgage giant's top executive.Being a low-risk enterprise does not mean "avoiding risk entirely," Fannie Mae president and chief executive Daniel Mudd told a National Association of Realtors regional summit. "Our job is to look deeply into our mortgage data and try to stretch our tolerances so that we can serve more people who need serving the most -- working families struggling to own or rent a home," Mr. Mudd said. He noted that borrowers are choosing interest-only and payment-option adjustable-rate mortgages so they can "squeeze" into a house. "But there's a problem here, of course. For working families, exotic mortgages can be a poison apple," he said, as the mortgages reset and the monthly payment goes up. Fannie Mae can be found online at http://www.fanniemae.com, and the NAR can be found at http://www.realtor.org.