Just in time (for a recession?). Fred & Fannie Tighten Lending

[Elliott]

WSJ 8/5/24:

Fannie, Freddie Are Poised to Tighten Real-Estate Lending Rules​

Move comes as federal regulators and prosecutors step up efforts to root out commercial mortgage fraud​

"The new rules might also require lenders to complete due diligence on the appraised value of a property, by evaluating its financial performance, for example, these people said.

Under the current system, lenders are able to take a more hands-off approach when it comes to borrower and property financials. They face incentives to trust the figures they are sent, rather than pursuing expensive audits or risking losing clients to too much red tape.

Fannie and Freddie declined to comment. The Federal Housing Finance Agency, which regulates the two entities, also declined to comment."

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Holding trillions in low rate mortgages, in receivership, and clobbering appraisers, so now F/F are going to close the barn door?

 

[J Grant]

WSJ 8/5/24:

Fannie, Freddie Are Poised to Tighten Real-Estate Lending Rules​

Move comes as federal regulators and prosecutors step up efforts to root out commercial mortgage fraud​

"The new rules might also require lenders to complete due diligence on the appraised value of a property, by evaluating its financial performance, for example, these people said.

Under the current system, lenders are able to take a more hands-off approach when it comes to borrower and property financials. They face incentives to trust the figures they are sent, rather than pursuing expensive audits or risking losing clients to too much red tape.

Fannie and Freddie declined to comment. The Federal Housing Finance Agency, which regulates the two entities, also declined to comment."

...................
Holding trillions in low rate mortgages, in receivership, and clobbering appraisers, so now F/F are going to close the barn door?

This referred to a commercial Mortgage fund. The main market that affects the average person is residential.

If commercial has a high frauld problem then it should be addressed.

 

[TerryRohrer]

What is the average person? Why can't they qualify for commercial loans? In

 

[J Grant]

What is the average person? Why can't they qualify for commercial loans? In

The average person ( the majority of folks ) owns and buys residential RE - not commercial.
I suppose they could qualify for a commercial loan , but investing in commercial RE is not something most are interested in - even if perhaps they should be.

 

[TerryRohrer]

Only $140 billion a year, so small potatoes. But the following is likely to continue unabated and remain completely stupid and irresponsible (taxpayers can afford unlimited idiocy):

"To ensure a strong focus on affordable housing and underserved markets, FHFA will require that at least 50 percent of the Enterprises’ multifamily businesses be mission-driven, affordable housing. In addition, for 2024, loans classified as supporting workforce housing properties in Appendix A of the Conservatorship Scorecard will be exempt from the volume caps."

FHFA Announces 2024 Multifamily Loan Purchase Caps for Fannie Mae and Freddie Mac

Washington, D.C. – The Federal Housing Finance Agency (FHFA) announced today that the 2024 multifamily loan purchase caps for Fannie Mae and Freddie Mac (the Enterprises) will be $70 billion for each Enterprise, for a combined total of $140 billion to support the multifamily market. To ensure a...

www.fhfa.gov

 

[Terrel L. Shields]

Multifamily here has exploded but I am seeing rent signs around them too.

 

[George Hatch]

I always frame income/expenses in terms of "as reported". I also do rent surveys to ascertain how the reported income/expenses line up with the comparables. If a lender isn't checking up on the financials that's on them.

 

[Terrel L. Shields]

My late brother used to say that bankers used to lend on the credit score and credit history, then FIRREA made them lend on the collateral, and when the economy got weak, they lent upon the financials.

 

[Fernando]

My late brother used to say that bankers used to lend on the credit score and credit history, then FIRREA made them lend on the collateral, and when the economy got weak, they lent upon the financials.

I missed the crying about the stock market today.
I was at the chiropractor this morning and he seemed to helped my leg pain.
Thanks, Terrel for your suggestion.

 

[Tom D]

FHA was for the lower income class with their issues. When i started selling r.e. it was all conventional. Then during the pres carter financial crisis it turned around and became mostly FHA in this big city.

Then wall street came in with no docs and mixing c paper with a paper loans, but selling it like it was only a paper loans.