The MBA is also seeking clarity on whether Freddie Mac’s proposal would allow sellers other than the current servicer to originate closed-end second mortgages, the use of automated valuation models (AVMs) or property inspection waivers, and potential caps on the number of loans that individual lenders can sell to Freddie Mac.
Call for transparency
The MBA emphasized that these details are crucial for stakeholders to evaluate the program’s mission and market-related impacts and benefits properly.
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“Failure to address these questions could cause market disruption, create unfair advantages/disadvantages for certain market participants, or reverse meaningful progress in the private market – ultimately jeopardizing increased diversity and stability in the secondary mortgage market,” the trade association said.
“We urge the FHFA to request the information that appears to be missing from the initial submission for this new product and further evaluate the issues raised in our comments before considering approval. MBA appreciates the opportunity to provide feedback on Freddie Mac’s proposed new product, and we look forward to continuing our ongoing partnership with FHFA.”
