Fannie Mae, Freddie Mac take Finger off Automatic Repurchase Trigger

Fannie Mae, Freddie Mac take Finger off Automatic Repurchase Trigger

The Housing Wire (10/20, Jackson) reported, "Fannie Mae and Freddie Mac said the government-sponsored enterprises won't require lenders to automatically repurchase loans with early payment defaults, reversing course on a key provision in the government-sponsored enterprise's new representation and warranty framework." Initially, the GSEs had said they would require automatic repurchase if the lender defaults in the first three months of the loan. But, on "Friday, both Fannie Mae and Freddie Mac said that 'upon further review, it has [been] determined that the automatic repurchase trigger will not be implemented." The piece added, "The GSEs also warned lenders to expect more loan reviews, saying its sampling of performing loans for rep and warranty review 'will likely increase in aggregate across all loans and lenders,' as both mortgage giants expand their discretionary review process on loans they guarantee.