What Kind of Buyback Language Can Mortgage Bankers Live With?

Shortly, the Federal Housing Finance Agency will come out with its parameters on what can – and can’t – trigger a buyback request from their wards, Fannie Mae and Freddie Mac. The agency isn’t giving too many hints about its thinking, but a few executives we spoke to warn that whatever the agency comes out with, it will be littered with caveats. But one thing to keep in mind: until there is real (and meaningful) clarification on buybacks, lenders of all different shapes and sizes will continue to be wary of loosening underwriting standards. It’s safe to say that buybacks on Fannie/ Freddie loans is one of the most important issues facing the industry today. Bar none.