Stricter lending standards adopted last year by Fannie Mae are beginning to pay off as the mortgage finance giant's "new book" of business is the strongest in a decade, the firm's chief executive said on Wednesday.
Fannie Mae is emphasizing safer, long-term, fixed-rate loans and asking lenders to make loans on homes with better appraisals to borrowers with better credit and better documentation of income.
"If you take all of these factors together, we're building the strongest book of business we've seen in the last decade," CEO Michael Williams said in remarks prepared for delivery to the group Women in Housing and Finance.
Separately, the company said Wednesday it sold $2 billion of benchmark bills at lower interest rates compared with last week's sale of similar maturities.
Separately Wednesday, Fannie Mae said it sold $1 billion of three-month bills, due Oct. 27, 2010, at a 0.173 percent stop-out rate, or lowest accepted rate, down from 0.181 percent for its $2 billion bills auctioned on July 21.
The largest U.S. home funding source also sold $1 billion of six-month bills due Jan. 26, 2011, at a 0.240 percent stop-out rate, down from a 0.243 percent rate for its $2 billion six-month bills sold a week ago.
The three-month bills were priced at 99.956 with a money market yield of 0.173 percent, and the six-month bills were priced at 99.879 with a money market yield of 0.240 percent. Settlement is July 28-29.
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