CHLA Statement on Fannie Mae’s Enhancement of Notice of Potential Defect
(Washington, D.C.) – CHLA Executive Director Scott Olson released the following statement regarding Fannie Mae’s release late last week of their “Notification of Potential Defect.”
“CHLA commends Fannie Mae and CEO Priscilla Almovodar for last week’s release of Fannie’s ‘Notification of Potential Defect’ – an alternative process for repurchase demands. This new step in the quality control process gives mortgage lenders the opportunity to address loan defect concerns earlier in the review process, and we hope it will lead to fewer costly and economically inefficient repurchase demands.
“Combined with Freddie Mac’s earlier fee based repurchase alternative pilot program, and FHFA’s Scorecard highlighting this issue, we are seeing real progress. These developments represent a more constructive approach to the dual objectives of maintaining GSE loan quality while not disincentivizing loans for underserved borrowers or eliminating borrower loss mitigation rights under repurchase demands.”