Research Report Reps and Warrants: Lessons from the GSEs Experience
Laurie Goodman, Jun Zhu
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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.
Research Areas Economic mobility and inequality Neighborhoods, cities, and metros Housing finance Housing
Tags Fiscal policy Federal housing programs and policies Housing markets
Policy Centers Housing Finance Policy Center