Dive Brief:
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Lenders don’t want to have to buy back the loans they sell into the secondary market, so they’re not making as many loans, says Wells Fargo’s chief executive officer.
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These “putbacks”—the term used when Fannie Mae, Freddie Mac and the Federal Housing Administration force lenders to buy back loans that don’t meet those agencies’ standards—have led to a lack of available credit and slowed housing’s recovery, despite low interest rates, John Stumpf told a crowd at the National Press Club on Wednesday.
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Stumpf said the automobile and energy industries have taken housing’s place as the leaders of the economic recovery.
Dive Insight:
Stumpf delivered some good news, too, saying regulators are starting to realize the impact of these putbacks and are trying to find ways to "open the credit box."