Fannie Mae Wants Greater Role in Mortgage Bail-Out

WASHINGTON – Fannie Mae Chief Executive Daniel Mudd this week called on credit unions to join his secondary mortgage market giant in helping right the foundering mortgage market. Mudd said Fannie Mae has helped refinance 33,000 mortgages–some $6 billion in home loans–since May, as the nation’s foreclosure rate has soared to new highs. He urged more than 400 credit union executives at NAFCU’s Congressional Caucus to step into the void in the mortgage market left by the dozens of lenders and brokers going out of business by helping out troubled mortgage borrowers. The Fannie Mae executive cited several credit union offerings: Desert Schools FCU monitoring members for exploding mortgages borrowed elsewhere; Local Government Employees FCU notifying all members of refinancing options; and North Carolina State Employees CU’s introduction of low-rate refinancing options, as examples of credit union initiative. He called on more credit unions to help out their troubled members with mortgage counseling and refinancing options; even if those troubled loans were borrowed at other institutions. Fannie Mae has asked federal regulators and Congress to increase two-year-old limits on the amount of mortgages it can hold in order to buy more mortgages on the market. In addition, Fannie Mae is seeking to buy larger jumbo mortgages that exceed the company’s current $417,000 conforming loan limit. While the increase in the size of loans that can be bought won’t affect homeowners in some markets, it will help average homeowners in high-cost markets.