Fannie Gets Conservative

Could it be that Fannie Mae has learned a lesson from its bad underwriting of the past? Its CEO says that the company is now taking on much higher quality mortgages on average. It's nice to see Fannie and its sibling Freddie Mac's $145 billion in taxpayer money led to the realization that some changes were warranted. Reuters reports:

Fannie Mae is emphasizing safer, long-term, fixed-rate loans and asking lenders to make loans on homes with better appraisals, to borrowers with better credit and better documentation of income.

"If you take all of these factors together, we're building the strongest book of business we've seen in the last decade," CEO Michael Williams said in remarks prepared for delivery to the group Women in Housing and Finance.

Of course, the loan quality the firm sought over the past decade wasn't a very high bar to exceed.

Read the full story at Reuters.