By Nick Timiraos | The Wall Street Journal
Changes in the mortgage market have led to Fannie Mae’s lending-policy review.
Fannie Mae is in discussions to curb its purchases of mortgages that require a minimum down payment of 3%, according to people familiar with the discussions.
Fannie never stopped accepting purchases of loans with 3% down payments, even after lending standards were ratcheted up following the housing bust. But many lenders stopped offering them, in part because they weren’t able to obtain mortgage insurance for those loans, which Fannie requires.
In recent months, however, a series of changes in the mortgage market have led to an uptick in low-down-payment loans available for sale to Fannie. That prompted a review of the company’s lending policies, and officials are said to be working on a plan to limit the company’s purchases of these loans. The changes aren’t being made because of immediate problems with loan performance, according to people familiar with the discussions.
