The mortgage industry has seen significant changes over the course of the past several years, particularly when it comes to loans and other products offered by Fannie Mae and Freddie Mac. In a recent report by the Federal Housing Finance Agency (FHFA), it was revealed that the cash window bias between Fannie Mae and Freddie Mac was contradictory to the FHFA’s principle of price equity and is causing a deviation from the desired risk-based pricing.
This news comes as a surprise to many in the mortgage industry, and could have sweeping implications for the way mortgage products are offered and serviced in the future. In order to maintain a consistent market and prevent lenders from taking excessive risks, the FHFA has put measures in place that govern the pricing of mortgages. However, in-depth analysis of the cash windows of both Fannie Mae and Freddie Mac indicates that this bias is still occasionally occurring, which is undermining the intended purpose of the measures laid out by the FHFA.
The main bullet points can be outlined as follows:
• FHFA recently revealed a cash window bias between Fannie Mae and Freddie Mac
• The bias is contradictory to FHFA’s principle of price equity and promotes a deviation from risk-based pricing
• Measures were put in place that govern the pricing of mortgages, however, bias is still occasionally occurring
• This bias is undermining the intended purpose of the measures laid out by the FHFA
You can read this full article at: https://www.housingwire.com/articles/opinion-leveling-the-playing-field-for-private-aggregators/(subscription required)
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