Cash in your bets, it's official, government housing regulators are clueless.
Okay, perhaps this isn't exactly news, but today they demonstrated their lack of ability to manage in the mortgage industry when Ed DeMarco, the acting director of the Federal Housing Finance Agency (aka the guy who is supposed to oversee under-conservatorship government sponsored entities) railed on a Fannie Mae program that his agency approved.
Demarco said that the Affordable Advantage program, which allows first-time home buyers in a few states to get a loan for a house for just $1,000 down, will be honored until until its expiration in March, but will not be renewed. He added that other parties made similar requests to Fannie Mae for such programs and he denied them, but this one just slipped right by him. Darn.
"This one got away from us. It was a miscommunication, and this agreement with these HFA's was signed without my knowledge. When I learned about it after the fact, I reviewed what has been done. I saw that there was a legal contract with the HFA's, and I made clear to Fannie Mae a couple of things: We are going to honor and respect that contract for its duration. It ends next March, and two, we are not doing this in the future. There were several other requests that had come into Fannie Mae from other parties for similar no down payment or very little down payment mortgages, and I said absolutely not, and so we have had nothing further on this. When this particular program with these HFA's expire, it will not be renewed."
CNBC's Diane Olick gets to the gritty of it in her latest post for her blog Realty Check.
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