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| Title: | Statement by OFHEO Director on Issuance of Letters by GSEs Regarding Nontraditional and Subprime Mortgage Products | | Source: | OFHEO | | Date: | 7/13/2007 |
Summary:
Fannie Mae and Freddie Mac today issued letters to their lender customers setting forth a program for assuring the Enterprises
purchase mortgages made in conformance with the Interagency Guidance on Nontraditional Mortgage Product Risks. This guidance
was promulgated by federal depository institution regulators and adopted by many state financial regulators. OFHEO made this
guidance applicable to Fannie Mae and Freddie Mac. The guidance focuses on certain classes of mortgages with unique underwriting
criteria, which typically allow borrowers to defer principal and, sometimes, interest. They include loan products that offer
low introductory interest rates that later reset to higher rates and/or have flexible payment options with the potential for
negative amortization. The Interagency Guidance was designed to ensure consistent application of sound and prudent credit
underwriting standards, risk management practices, and protections for the consumer.
Please select the Related Document to view OFHEO's full article.
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