Fannie Mae and Ginnie Mae are seeking to protect taxpayers as a flood of new lenders apply to do business with them. That’s also helping big banks’ profit and blunting Federal Reserve efforts to boost housing.
A rush by U.S. homeowners to refinance at near record-low interest rates marks a rare bright spot for the mortgage industry, under attack for choking the economy with shoddy loans and botched foreclosures.
U.S. lenders including Bank of America Corp. still face years of litigation and billions of dollars in liabilities tied to the housing collapse after agreeing to settle a probe of abusive foreclosure practices.
Warren Buffett, whose prediction last year of a housing recovery was premature, is raising his bet on a rebound with his $3.85 billion bid for a mortgage business and loan portfolio from bankrupt Residential Capital LLC.