Reps and Warrants: Lessons from the GSEs Experience

Research Report

Reps and Warrants: Lessons from the GSEs Experience

October 24, 2013

Abstract

GSE credit has become very tight, with a significant increase in the average credit score of approved loans. How Fannie Mae and Freddie Mac are enforcing their Representations and Warranties (Reps and Warrants) rights is playing a significant role in this phenomenon. In this paper, we use the recently released Freddie Mac and Fannie Mae loan level credit data and find that put-backs are having an outsized chilling effect on lower FICO/higher LTV loans.

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