Reps and Warrants: Lessons from the GSES Experience

Posted: 13 Jun 2016

See all articles by Laurie S. Goodman

Laurie S. Goodman

The Urban Institute - Housing Finance Policy Center

Jun Zhu

Urban Institute

Date Written: 2014

Abstract

Obtaining a loan guaranteed by Fannie Mae and Freddie Mac is more difficult today than it was in 2001. While many factors have caused this change, the system of representations and warranties, under which lenders can be forced to repurchase loans long after they are sold to the GSEs, is a hidden contributor. Recent efforts by Fannie and Freddie and their regulator to fix the problem should help, but there is room to give lenders greater assurance without harming Fannie and Freddie. And that assurance should translate into greater lender willingness to increase lending by expanding “the credit box".

Suggested Citation

Goodman, Laurie S. and Zhu, Jun, Reps and Warrants: Lessons from the GSES Experience (2014). Journal of Fixed Income, Vol. 24, No. 1, 2014, Available at SSRN: https://ssrn.com/abstract=2784272

Laurie S. Goodman

The Urban Institute - Housing Finance Policy Center ( email )

2100 M Street NW
Washington, DC 20037
United States

Jun Zhu (Contact Author)

Urban Institute ( email )

2100 M Street N.W.
Washington, DC 20037
United States

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