Fannie Mae to Loosen Rules on Mortgage Refinancing

2009 February 6

February 6, 2009 - Fannie Mae will loosen rules for homeowners seeking to lower their mortgage payments by refinancing.

The District company, which accounts for more than 40 percent of the $12 trillion in U.S. residential mortgage debt, is seeking to break a “logjam” in refinancing and allow more homeowners to take advantage of near-record low interest rates, according to Brian Faith, a spokesman for Fannie Mae, which like its rival, Freddie Mac, is under government control.

The increased flexibility for borrowers isn’t enough to significantly harm mortgage-bond investors and mortgage insurers, analysts said.

“This is not yet the no-appraisal refi wave that many have feared,” Matt Jozoff and Brian Ye, mortgage-bond analysts at J.P. Morgan Chase, wrote in note to clients yesterday.

Fannie Mae to Loosen Refinancing Rules

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