Mortgage repurchaser Fannie Mae has purchased or guaranteed $310 billion in Alt-A loans, or 12 percent of the company's single-family mortgage book of business, the company said in releasing its 2006 results. Alt-A loans are those with reduced documentation requirements or other features that make them riskier than prime loans, but which have performed better than subprime loans. Many lenders are experiencing problems financing Alt-A because investors who buy mortgage-backed securities have cut back on such investments because of fears about the housing and mortgage lending markets. Fannie Mae's sister company, Freddie Mac, announced this week it would address the issue by giving experienced lenders 90-day commitments to buy their Alt-A loans, enabling borrowers to lock in rates. Fannie Mae officials said they believe the Alt-A loans they guarantee have "more favorable credit characteristics than the overall market of Alt-A loans," because the loans must comply with F...
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