The Mortgage Bankers Association is willing to back a GSE-related refinancing bill introduced by Sen. Al Franken, D., Minn., but wants assurances that the industry will no longer be hit with buyback requests on loans that are several years old.
In a new letter, MBA chief Dave Stevens said the trade group supports Franken's bill, but wants modifications made to it where the Federal Housing Finance Agency would “set clear, consistent and transparent GSE loan repurchase request procedures.”
Stevens argues that FHFA should “consider setting a clear limit on the duration of an originator's repurchase obligation following the origination date.”
As reported by National Mortgage News several times, Fannie Mae and Freddie Mac in some cases are asking for buybacks on loans that are more than three years old – and in some instances have requested seller/servicers to repurchase performing mortgages that were later found to have underwriting defects.
Buybacks have cost the mortgage industry tens of billions of dollars over the past three years. “Some of these involved loans dating back to 2003,” one trade group official told NMN.
He added: “The buyback issue is not going away.”
Sen. Franken's bill is called 'The Helping Homeowners Refinance Act' and among other things would prevent the GSEs from creating disincentives for homeowners seeking to refinance. Its overall goal is to streamline the refi process, especially for borrowers with reduced equity.
