FHFA’s Thompson addresses rise in enterprise repurchase requests

Federal Housing Finance Agency Director Sandra Thompson recognized mortgage lenders’ concerns with rising repurchase requests from Fannie Mae and Freddie Mac, though she said requests have declined since their peak in early 2022.

Industry Concerns: In public remarks, Thompson said her agency has heard the industry's concerns regarding loan defects that may not rise to the materiality necessary to justify a repurchase. She said that while repurchase requests are down after they spiked during the boom in lending and refinancing, today’s high interest rate environment—which increases losses from repurchased loans—is contributing to the severity of this issue.

Enterprise Response: Thompson said the enterprises are working to improve the language in their selling guides to be clearer and to provide more consistent feedback to lenders when making a repurchase request to ensure less underwriting ambiguity.

ICBA View: ICBA has engaged the FHFA and the enterprises on increased repurchase demands from the GSEs to lenders.

ICBA Affordability Plan: Separately, ICBA and other groups last week issued a proposal to address housing affordability challenges by reducing historically high long-term mortgage rates relative to long-term Treasury bonds. The groups urged:

  • The Federal Reserve to maintain its stock of mortgage-backed securities and to suspend further runoff until liquidity and the spread between the 30-year fixed-rate mortgage and 10-year Treasury stabilizes.

  • The Treasury Department and FHFA to amend the Fannie Mae and Freddie Mac Preferred Stock Purchase Agreements to enable the enterprises to temporarily purchase their own and Ginnie Mae’s mortgage-backed securities.