Feb. 2 (FreeRateUpdate.com) – Fannie Mae and Freddie Mac are trying to push back onto the banks some bad loans. That’s not breaking news, but that they’re doing this aggressively and in record numbers is. This will affect underwriting 
guidelines which are already tight. Fannie Mae and Freddie Mac are said to be going through every detail of bad mortgages to pin the loss on the originating lender. New policies, or should I say, newly practiced policies, protect mortgage insurers Fannie Mae and Freddie Mac allowing them push losses off on lenders if warranted.
Profits are likely to fall once the Fed discontinues their buying of mortgage backed securities in March, lowering demand and MBS prices pushing mortgage rates up and new origination down as well. Some analysts are saying mortgage rates may not suffer as anticipated after March and that has some betting the other way, on continued low mortgage rates. That list does not include Wells Fargo, who it was revealed bet nearly a billion dollars over the course of last year that mortgage rates will rise significantly.
The entire mortgage market is pretty much now Fannie Mae and Freddie Mac, yet Barnkey Frank wants to get rid of them both. One problem with that is there really hasn’t been any replacement even formulated.
This video covers all this and more. Click to play.