US government-controlled mortgage finance companies Freddie Mac and Fannie Mae are working on a program to help independent mortgage banks get access to short-term credit needed to make home loans,the Wall Street Journal said,citing people familiar with the matter.
Fannie and Freddie will provide advance commitments for the purchase of home mortgages that meet certain standards,according to the paper.
The program aims to reduce risks that independent mortgage banks face so they can obtain short-term credit,the paper said.
The Journal’s sources added that the companies are planning to build on an undisclosed pilot program that Freddie has with Provident Funding Associates LP and warehouse-lender NattyMac,where short-term funding would be provided to mortgage companies. Spokesmen for Fannie and Freddie declined to discuss details of the plan with the paper.
Fannie and Freddie could not be immediately reached for comment by Reuters outside regular US business hours.