Freddie Mac toughens subprime mortgage standards - 2007-02-27
Mortgage finance company Freddie Mac will no longer purchase subprime mortgages that are most sensitive to increases in interest rates and have the highest probability of foreclosure, the company declared on Tuesday. Freddie Mac, the second-biggest provider of money for U.S. home loans, will invest strictly in mortgages that assume a borrower can make the highest possible monthly payments to take out the risk of delinquency, Freddie Mac CEO Richard Syron said.
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Mortgage delinquency rate at 4-year high - 2007-02-27
The Federal Reserve said that the delinquency rate on banks' residential real-estate loans increased last quarter to the highest level in four years. The share of the loans on which payments were at least 30 days overdue climbed to 2.11 percent, the highest since the fourth quarter of 2002. The drop in credit quality comes in a period of sustained gains in employment and incomes, evidence that weaker underwriting standards, not economic weakness, may be to blame.
Read the full story at Chicago Tribune