Fannie Mae is actively buying prime Alt A Mortgage Market loans and has purchased or guaranteed $310 billion of these reduced-documentation loans, the company disclosed in releasing its 2006 financial results.
As of June 30, alt-A loans make up “12% of our single-family mortgage credit book of business,” Fannie said. The government sponsored enterprise (GSE) offers 90-day forward commitments to its traditional lenders, who generally specialize in prime loans.
The disclosures show that the weighted average credit score on the alt-A book of business is 720, the average loan-to-value ratio is 64%, and the average loan amount is $172,500. In addition, 39% of the alt-A loans have credit enhancements and only 33% are adjustable-rate.
Approximately 1.01% of the alt-A book is seriously delinquent. “We believe that our guaranteed Alt-A loans have more favorable credit characteristics than the overall market for Alt-A loans,” Fannie said.
Tags: Alt A Mortgage Market, Fannie Mae, Government Sponsored Enterprise (GSE), Mortgage News, Prime Mortgage Market
