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Countrywide, Fannie Mae OK $8 Billion in Mortgage Funding

July 12, 1992|From Times Wire Services

Countrywide Funding Corporation, based in Pasadena, and the Federal National Mortgage Assn. (Fannie Mae) have signed a commitment to finance $8 billion in home mortgages. Fannie Mae said the agreement is the single largest commitment in its history.

The mortgages, to be originated by Countrywide in all 50 states, will be exchanged for mortgage-backed securities issued by Fannie Mae. Countrywide is the nation's largest mortgage banker.

The $8 billion agreement includes a previously announced $1.25 billion of a variety of Fannie Mae's affordable home mortgages, including reduced down payment loans.

"Countrywide's commitment will provide home financing for tens of thousands of home buyers, ranging from lower income Americans buying their first home to middle-income homeowners refinancing their mortgage," said John H. Fulford, senior vice president in charge of Fannie Mae's western regional office.

The $1.25 billion of affordable-housing mortgages is the largest of its type to date and includes an innovative "second review" by Countrywide of mortgage applicants who do not initially qualify.

The loan files of lower income and minority applicants declined at Countrywide's retail offices will receive a second review by a special underwriting unit at the firm's national headquarters here.

Many of the affordable-housing loans will use Fannie Mae's Community Home Buyer's Program (CHBP). CHBP provides flexible underwriting criteria, including loans up to 95% of the home's value, with a provision for a 3% down payment by the borrower and a 2% contribution from gifts.

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