By the Journal of Commerce

Officials with the Alaska Housing Finance Corp. are cracking down on lenders who disregard the agency's credit and property guidelines, and from now on will require them to repurchase loans that become delinquent at any time within the first three years.

Laurie Holte, officer of residential lending for AHFC, said Oct. 2 that the problem has been going on at least six months, but that recent audits revealed an alarming trend of deterioration in underwriting of AHFC loans.

Holte was quick to add, however, that for the state of Alaska in general and AHFC in particular, the rate of foreclosures is low.

“We just noticed a trend and we want to nip it in the bud,” she said.

On average, the agency reviews about 10 percent of all loans, but just how many depends on the lender.

Beginning Oct. 6, when an audit file exhibits serious deviations from AHFC guidelines, the lender will be required to sign an agreement to repurchase the loan within 30 days if it becomes more than 30 days delinquent at any time within the first three years.

All loans reported as an early payment default, that is delinquent within the first three years, will be audited, she said. If the file exhibits serious deficiencies, the lender will be required to repurchase the loan.

Holte noted in a credit memo that AHFC requires that the lender's qualified underwriter carefully evaluate the overall credit of the borrower and the property offered as security, and that the lender's underwriter and the lender believe that the mortgage is acceptable to private institutional investors. The credit documentation should clearly demonstrate the borrower's ability and willingness to repay the loan and that the subject property is adequate collateral for securing the debt.