Fannie and Freddie are Changing

With all the talk about change these days, you should know that change is coming to the mortgage industry.

New York state’s Attorney General, Mario Cuomo, has agreed to end his investigation of Fannie Mae and Freddie Mac after the two organizations agreed to change the way they do business.

Cuomo was quoted as saying that he thinks this will really change the mortgage industry since Fannie Mae and Freddie Mac are so influential.

If you didn’t know, Fannie Mae, which is based in Washington, DC, stands for Federal National Mortgage Association. The Federal Home Loan Mortgage Corporation or Freddie Mac is based in MacLean, VA.

Fannie Mae and Freddie Mac have admitted no wrongdoing, but each organization will pay $12 million to set up an in independent committee to keep an eye on the way homes are being appraised.

Mortgage lenders who work with Fannie Mae and Freddie Mac will no longer be able to use their own staff for initial appraisals. Nor will they be able to use appraisal management firms that have interest in or own outright.