Fannie Mae is building the “strongest book of business we’ve seen in the last decade,” the GSE’s president and CEO, Michael Williams, proclaimed to a group of industry professionals this week.
While tighter underwriting standards may mean fewer consumers are able to get loans and banks are holding credit close to their chests, Williams says the type of prudent lending that has taken hold in the aftermath of the housing bust is translating into higher quality, more sustainable loans for Fannie Mae.
Speaking at a Women in Housing and Finance luncheon in Washington, D.C. Wednesday, Williams attributed the improving loan quality to the GSE’s emphasis on safer products, especially long-term, fixed-rate loans; better borrower documentation; and more accurate property appraisals.
“By adopting these standards, we have begun to build a new book of business with some of the highest-quality loans we have ever seen,” Williams said.
He pointed to several specific loan characteristics that support his assertion. Credit scores for new borrowers are now averaging about 760, which FICO rates as “top tier.”
Over 90 percent of Fannie Mae’s new borrowers have…
Article by DSNews.com.