The defect rate for mortgages grew significantly in Q2 2024, reaching 1.81% of loans, a continuation of the upward trend seen in Q1 2024.
Critical defects, particularly in income and employment data, represent 37.01% of all defects, increasing 58% since the first quarter, while asset-based defects surged by 373%.
Freddie Mac's loan repurchase volume rose 29% to $430 million in Q2 2024, largely due to income verification defects, indicating ongoing challenges for lenders.
ACES remains optimistic that new tools from government-sponsored enterprises will help rectify growing income and employment defects, which they view as baffling.
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