Fannie CEO says worries about adjustable mortgages
Wed May 10, 2006 1:24 PM ET
WASHINGTON, May 10 (Reuters) - Fannie Mae's <FNM.N> chief executive said on Wednesday the U.S. housing market will face significant resetting of adjustable rate mortgages over the next two years and he worries about this sparking foreclosures in some locations.
Daniel Mudd, president and chief executive officer of the government-sponsored mortgage giant, told Reuters in an interview that Fannie Mae models suggest a couple of reset "spike periods" in the next two years, based on past originations of mortgages with adjustable rates and other features such as low initial "teaser rate" periods.
It is still unclear what will happen to the housing market when these mortgages reset, especially given some of the weakening in certain housing markets, such as vacation areas with a lot of investment buyers.
Wed May 10, 2006 1:24 PM ET
WASHINGTON, May 10 (Reuters) - Fannie Mae's <FNM.N> chief executive said on Wednesday the U.S. housing market will face significant resetting of adjustable rate mortgages over the next two years and he worries about this sparking foreclosures in some locations.
Daniel Mudd, president and chief executive officer of the government-sponsored mortgage giant, told Reuters in an interview that Fannie Mae models suggest a couple of reset "spike periods" in the next two years, based on past originations of mortgages with adjustable rates and other features such as low initial "teaser rate" periods.
It is still unclear what will happen to the housing market when these mortgages reset, especially given some of the weakening in certain housing markets, such as vacation areas with a lot of investment buyers.
