Executives of Fannie Mae and Freddie Mac took pains recently to reassure lenders they are forging ahead this year with programs to help them reach low-income borrowers, despite problems including rising delinquencies.

The entry of low-income households into the market gives lenders "a broader, more profitable way of doing business," said David Glenn, president of the Federal Home Loan Mortgage Corp., or Freddie Mac, at a recent Mortgage Bankers Association conference in New York for senior executives.

But this broader market carries risks. Loans to low-income borrowers who make small down payments are especially vulnerable to default, observers point out.

Fannie and Freddie have both begun accepting more of these riskier loans, said Jonathan Gray, mortgage company analyst at Sanford C. Bernstein & Co., New York. But he added that the agencies have moved to reduce risk by requiring that borrowers making small down payments carry additional mortgage insurance. Mortgage insurance reduces or entirely covers mortgageholders' losses from defaults.

Both Mr. Glenn and Franklin D. Raines, vice chairman of the Federal National Mortgage Association, or Fannie Mae, said their agencies recognize the difficulties of working with low-income borrowers.

Complex underwriting criteria, discrimination, and higher servicing costs can hamper lenders as well as borrowers, Mr. Raines said.

"But we are convinced these are not insurmountable issues," he said.

While Fannie Mae has an array of evaluation and underwriting systems it can employ when considering a loan, the company will not put technology and number crunching above its faith in lenders' own judgment, Mr. Raines emphasized.

"We won't go back and second guess loans you have already made and ask you to buy them back" if they are not in sync with a new way of assessing risks, he said.

Mr. Raines was repeating assurances to lenders first given by James A. Johnson, Fannie Mae's chairman, at the MBA's annual convention last October when a controversy erupted over Freddie Mac's use of credit scoring.

Mr. Raines said credit scoring is a new tool that Fannie Mae is using to help qualify borrowers, but he said the system is meant to complement other evaluations that are routinely done.

"Credit scoring is a way to do more," he said, "not an excuse to do less."

Freddie Mac also remains ambitious in funding affordable housing; low- and moderate-income loans now account for more than one-third of loan purchases, Mr. Glenn said.

In fact, using more precise evaluation tools, the agency now regularly takes in mortgages from borrowers who might not have received approval a few years ago, Mr. Glenn said.

Freddie Mac is also forming ties with community development groups to improve its access to homebuyers, Mr. Glenn said.

The agency is also trying to improve lenders' access to the secondary market through products that can quickly supply approvals and commitments.

However, Mr. Glenn said, "We have to resist toying with the fundamentals of the system because the system works so well."

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