Loan Think

What We're Hearing

Published February 04, 2009, 7:00 a.m. EST

1 Min Read

It would appear that hell has frozen over. How do I know? Because yesterday the Mortgage Bankers Association formally endorsed the idea of allowing Fannie Mae and Freddie Mac to get involved in the warehouse lending sector by purchasing loan participations in these lines of credit. Up until the 'Great Recession' and mortgage market meltdown of 2008/2009 it would be down right heresy for any respectable mortgage banker to suggest any type of GSE involvement in warehouse lending. Of course, that was then and this is now. In his prepared statement before the House Banking Committee MBA chief John Courson also noted that mortgage bankers are struggling with what he called "an unprecedented volume" of loan buyback requests from the GSEs. In other words, just as the GSEs are hammering mortgage bankers with buyback requests, the trade group wants to help the GSEs. We have truly entered the Twilight Zoneâ¦

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