Changing Standards to Meet New Realities (On the Road‪)‬

Speaking words that, just a few short years ago, some would have found hard to believe came from a Fannie Mae executive, Deborah Slade-Horsey, vice president of single-family risk policy for Fannie Mae, told an audience at the Mortgage Bankers Association's (MBA's) Quality Assurance and Residential Underwriting Conference in Dallas in September, "Homeownership is not necessarily the best option for all individuals, and there need to be other alternatives that give them safe, affordable housing. We all have to acknowledge that the practices in the past few years were not prudent for the long run. It was short-term thinking," she declared, adding: "We're putting in place--as we did in the 1980s--[a policy that says:] Documentation matters. DTIs [debt-to-income ratios] matter." Listening to Slade-Horsey speak, audience member Lloyd Kushner, national retail government credit policy manager in the Rolling Meadow, Illinois, office of Calabasas, California-based Bank of America Home Loans, commented, "You're concerned about something that you can't control, which is [changing property] values. You can control someone and limit the risk you want to take by the percentage of income [they have], and not force them into a situation where they can't afford the loan."