A report made by Reuters last Wednesday says that the regulator for U.S. housing finance giants Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) told the two firms on Wednesday to provide more support to low-income Americans taking out mortgages and refinancing home loans.
Goals that would push the Federal Housing Finance Agency chief Mel Watt's intention to broaden access to housing credit has been released for the two government-controlled firms for 2015-2017. Furthermore, the source says that the rules direct both Fannie Mae and Freddie Mac to expand the number of loans they back for low-income families to 24 percent of the their purchases of single-family home mortgages over the period, up from a target of 23 percent in 2014.
Moreover, it was reported that FHFA also asked each firm to make mortgages refinanced by low-income families a bigger share of their refinancing purchases, and to increase the number of mortgages they buy for multi-family properties each year. Both Fannie Mae and Freddie Mac have been controlled by the government since 2008 when taxpayers bailed them out during the housing market collapse. Both don't lend money, but they back loans or buy mortgages from lenders and sell them as securities with a government guarantee. With such, both are considered major driver of credit access. Currently, they back most new U.S. mortgages.
This movement may be good news to low-income families or individuals looking forward to purchasing a home. On the other side this could stimulate a debate in congress as another source mentions that Many Republican lawmakers believe that Fannie Mae and Freddie Mac were somehow responsible for the housing bubble and the 2007-2009 financial crisis because of their policies that target supporting mortgage access for the poor.
