Fannie Mae CEO Franklin Raines told mortgage bankers at their annual meeting in San Francisco that increasing speculative activity in some booming housing markets could spell trouble.
The share of home sales involving investors - rather than buyers who will actually reside in the property - has climbed from 5.75 percent in 2003 to more than 9 percent now, Raines said.
He also said that meeting the needs of credit-challenged borrowers was a growth area for the industry and urged mortgage bankers to adopt some of the marketing strategies of subprime lenders, noting that “as many as half of the people getting subprime loans could qualify for conventional loans if they were offered.”