The program aims to curb risks that independent mortgage banks face so they can obtain short-term credit
US government-controlled mortgage finance companies, Freddie Mac and Fannie Mae, are preparing to launch a program aimed to help independent mortgage banks get access to short-term credit needed to make home loans – reported THE WALL STREET JOURNAL, citing people familiar with the matter.
Fannie and Freddie are expected to provide advance commitments for the purchase of home mortgages that meet certain standards. The program aims to curb risks that independent mortgage banks face so they can obtain short-term credit.
Fannie and Freddie are planning to build on a undisclosed pilot program that Freddie has with Provident Funding Associates LP, and with NattyMac, that provides short-term funding to mortgage companies, reported the Journal.