Sonu Mittal on home equity
From Freddie Mac’s Sonu Mittal on affordability and the cost to originate · · HousingWire
“We launched a second lien product to help homeowners extract equity responsibly without giving up their low mortgage rates, providing an alternative to cash-out refinancing, which often means losing sub-4% rates on the entire balance.”
On , Sonu Mittal, Executive Vice President & Head of the Single-Family Acquisitions Division at FEDERAL HOME LOAN MORTG CORP, spoke about home equity during Freddie Mac’s Sonu Mittal on affordability and the cost to originate on HousingWire.
About Sonu Mittal
In a September 2024 podcast, Sonu Mittal, senior vice president and head of single-family acquisitions at Freddie Mac, discussed the company’s efforts to address housing affordability and reduce costs for lenders. Mittal stated that more than 50% of loans purchased by Freddie Mac were for first-time home buyers. He outlined three areas of focus: down payment assistance, technology investment, and consumer education. Mittal noted that Freddie Mac’s down payment assistance tool, DPA1, had been used by over 4,000 lenders, and that the company planned to expand its availability. He also said that special purpose credit programs launched in 2022 had helped nearly 10,000 borrowers, most of whom were families of color. Mittal highlighted Freddie Mac’s second lien product, which he described as a way for homeowners to extract equity without giving up low mortgage rates through cash-out refinancing. He said the cost to originate a mortgage had risen by over $3,000 per loan in three years, calling that trend unsustainable. Mittal reported a 50% reduction in non-acceptable quality rates and a 60% improvement in repurchase notices since late 2022, attributing the progress to industry collaboration and a repurchase alternative pilot. He encouraged lenders to use Freddie Mac’s tools, such as the loan product advisor, to improve efficiency and margins.