The government-sponsored enterprises have updated their process for resolving repurchases in a move intended to provide lenders with more certainty.
Fannie Mae and its secondary cousin Freddie Mac have both implemented an independent
dispute resolution process for resolving repurchase disputes.
With the new process, the pair of secondary lenders hope to avoid lengthy periods that had repurchase disputes sometimes lingering for long periods of time.
An announcement Tuesday from the two GSEs’ regulator and conservator, the Federal Housing Finance Agency,
indicated that the process was cooperatively developed by FHFA and the GSEs with input and support from the mortgage industry.
The independent dispute resolution process “is the final part of the representation-and-warranty framework which, taken as a whole, will increase clarity for lenders and will ultimately increase access to mortgages for creditworthy borrowers,” FHFA Director Melvin L. Watt said in the statement.
Washington-based Fannie outlined the new process in Selling Guide Announcement SEL-2016-01, while McLean, Virginia-based Freddie covered the process in Bulletin No. 2016-1.
Mortgage Bankers Association President and Chief Executive Officer David H. Stevens issued a statement applauding the revised process and praising the GSEs and FHFA for the work they’ve done over the past four years on repurchases.
“The independent dispute resolution process is an important final piece to this effort,” Stevens said. “In its totality, the representation-and-warranty framework will provide much needed certainty and transparency for lenders of all sizes and help broaden access to credit for borrowers.”
The new process impacts all loans delivered on or after Jan. 1.
