Hello, LOs!
Federal Housing Finance Agency Acting Director Sandra Thompson isn't fazed by concerns raised in response to Fannie Mae including rental payments in its underwriting process.
In a virtual event hosted by the National Housing Conference, Thompson batted away arguments that she is leading the FHFA's regulated entities down a risky path.
"There was some pushback that Fannie Mae got when we announced the [inclusion of positive rental history]," Thompson said. "People thought, 'Oh, you're opening the credit box, you're doing all these things, and that's really not a good indicator.' Well, that's not the only indicator that goes into consideration when you're underwriting the loans."
Thompson said that not taking into consideration rental payments "didn't make sense." She noted that, especially in places like Washington, D.C., Chicago and New York, rents can be as high as mortgage payments.
"At the end of the day, we all want to make sure that credit is given to credit-worthy borrowers, and how we look at credit needs to change," said Thompson. "We're really being thoughtful about that."
That's not all. She also said that there may be other ways to determine what borrowers are able to pay.
"There are other things that probably should be taken into consideration, given today's generation and our utilization of technology, like the repayment of cellphones," said Thompson.
She also said she doesn't equate those changes, which might allow more borrowers to qualify, with widening the credit box.
Given that the GSEs book of business is, in Thompson's words, "pristine," what other non-traditional indicators of the ability to pay could be considered in the underwriting process? Is there anything that definitely should not be considered? Have you noticed any surprising positive responses on loans from the GSEs as a result of the rental payment change? Send a note to gkromrei@housingwire.com
Georgia Kromrei
Senior Mortgage Reporter, HousingWire
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