Risk of Ineligibility Up as Purchase Share Rises

The evolution from a refinance to a purchase market has raised the risk of defects. Government-insured mortgages are more at risk than conventional loans.

In the first quarter of this year, mortgage originations had a critical defect rate of 1.61 percent. The rate reflects loans with at least one defect.

Defects are defined as a defect that would result in a residential loan being ineligible for sale to Fannie Mae.

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From:: Financing