New credit check requirements cause of concern for mortgage lenders.
Fannie Mae recently introduced a new rule that would require lenders to run an extra credit check on potential borrowers before they closed on their mortgages. That requirement caused some consternation from consumers, and now lenders are also expressing their concern.

According to a report in the Washington Post, because Fannie Mae has been requiring a second check right before closing, many banks have suffered through logistical nightmares. Some consumers may have been unaware of the new requirement and gone out and gotten new loans. Banks say that additional debt – even if it’s relatively small and short-term – is causing a number of borrowers to be rejected, and in doing so creating problems and logjams at a time when the housing market is at its lowest point in over a decade.

Fannie Mae is now reviewing the policy, the Post’s report said, based largely on the amount of negative feedback it has gotten from lenders regarding the rule. It has also removed any reference to the policy from its website while it considers what to do about it.

A report from the Wall Street Journal said that the new financial overhaul bill will change the mortgage market considerably, though it has little mention of just what the roles of Fannie Mae and Freddie Mac will be in the new environment.

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