The Federal Home Loan Mortgage Corp. has relaxed its hard-line stance against buying loans that lenders obtained from brokers.
Jittery about the credit quality of such loans, Freddie Mac two years ago banned them from its routine purchase programs. Any lender wishing to sell brokered loans had to negotiate special contracts with the agency.
Starting March 31, however, lenders will again be able to sell those loans through the less cumbersome, standard programs - as long as they have adopted certain quality-control procedures.
The shift reflects a growing belief in the industry that brokers can be a safe and efficient source of loans.
"We have seen that prudent sellers have already established many effective methods for ensuring the production of investment-quality" loans from brokers, Freddie Mac wrote in a recent bulletin to lenders.
The bulletin said lenders who want to sell to the agency must develop written standards for brokered loans and ensure that the brokers they use have "sufficient experience and demonstrated integrity."
The Federal National Mortgage Association, Freddie Mac's chief rival, never banned brokered loans from its routine purchase programs.
