Mudd: Fannie Servicer Workouts at 750 a Week

Fannie Mae's servicers are reworking loans for delinquent borrowers at the rate of 750 a week as part of its effort to bring stability to the housing sector, Fannie president and chief executive Daniel Mudd told real estate professionals gathered in Las Vegas Nov. 13 for their annual convention.The workouts are part of the government-sponsored enterprise's expanded effort to promote sustainable homeownership. Under its HomeStay initiative, Mr. Mudd told the National Association of Realtors meeting, Fannie Mae has also backed new, safer fixed-rate loans for 45,000 subprime borrowers who aren't yet late on their payments, but could be if they waited until their adjustable-rate mortgages reset. But in the face of what he called "the most serious disruption in the mortgage markets in decades," the Fannie CEO said the GSE could do more if it were able to buy more mortgages and its loan limits were raised in more high-cost areas. Mr. Mudd predicted that housing prices will continue to fall throughout 2008 -- and that it "may be years" before price appreciation returns to the "customary" 5% a year. But despite the dire forecast, and fear that another wave of foreclosures is coming next spring, Mr. Mudd said he had no doubt that the housing sector is on solid footing. "I completely believe we are going to get through this," he told the conference. "Beyond the correction, the future of housing looks good."