Concerned about the slow-moving housing rebound and hurting the economy’s recovery, the Obama administration and federal regulators are reversing course on some of the biggest post-crisis efforts to tighten mortgage-lending standards. Now, mortgage giants Fannie Mae and Freddie Mac are being directed to focus on making more credit available to homeowners—a U-turn from previous calls to pull back from the mortgage market.
In the coming weeks, six agencies will finalize new rules for mortgages that are packaged into securities by private investors. The rules largely abandon previous proposals to require larger down payments on mortgages in certain types of mortgage-backed securities. That’s prompted critics to worry that regulators, in loosening the reins, could be opening the way for another boom and bust.
Wall Street Journal, May 14, 2014
