Magazine article American Banker

Institutions Behind FM Watch "Cannot Win with the Fact"

Magazine article American Banker

Institutions Behind FM Watch "Cannot Win with the Fact"

Article excerpt

To the Editor:

I am writing to respond to the recent allegations of "bullying" made in the name of FM Watch, the coalition of subprime lenders, mortgage insurers, and megabanks seeking to thwart Freddie Mac's ongoing efforts to reduce mortgage costs for America's families.

Let me state unequivocally: Freddie Mac has not, does not, and will not do business this way.

The institutions we supposedly threatened are our customers and business partners. Freddie Mac remains committed to working with them. By working together we can make mortgage credit more available and affordable in the best interest of consumers.

Why the smear campaign? Because the institutions behind FM Watch cannot win with the facts. Their campaign seeks to prevent Freddie Mac from fulfilling our congressional mandate to promote low-cost mortgage credit for America's families.

Freddie Mac's innovation is succeeding in slashing costs from every step in the mortgage process.

Considering who is backing FM Watch, it is easy to understand why they object:

Subprime lenders that are trying to preserve an extremely costly and in many cases unfair way of doing business. It's no surprise these lenders react when Freddie Mac finances mortgages for borrowers who previously paid too much. By working with our lender customers to finance these borrowers safely and fairly, Freddie Mac is helping families reduce their costs and build a financial stake in their homes and communities. We are buying these mortgages using the toughest anti-predatory-lending standards in the industry. We invite FM Watch members to join us in taking a stand against predatory lenders.

Mortgage insurance companies that have an interest in perpetuating their inefficient, expensive products. Mortgage insurers have entered into lucrative arrangements with some large lenders that create an incentive to use high-cost mortgage insurance products, loading unnecessary expenses on low- and moderate-income borrowers. …

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