Fannie-Freddie Overseer Easing Loan Buybacks: Mortgages
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Melvin L. Watt, the overseer of Fannie Mae and Freddie Mac, is loosening rules that have forced banks to buy back billions of dollars worth of flawed home loans in an effort to spur the housing market.
Watt, who took over in January as head of the Federal Housing Finance Agency, will announce in a speech today a series of steps intended to stimulate lending. More than six years after the housing bubble burst, lenders remain cautious about making home loans to borrowers with less-than-perfect credit because they could end up absorbing losses if the loans default.