We have reviewed the new put-back policy FHFA announced today.  As noted, we think its timing takes some of the steam out of Democratic legislation designed to promote refis, an issue with increasing political heat in this election season.  In concert with other GSE seller-servicing initiatives, the policy will clarify GSE purchase, repurchase and servicing standards, shedding needed light and improving accountability in all of these important areas.  But who will bear the heightened risk resulting from reduced GSE put-back power depends on whether the GSEs can in fact build quality control (QC) systems up to snuff.

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