Eliminating Fannie Mae and Freddie Mac Without Legislation

The GSEs "are not providing anything to the housing market; full stop," said AEI's Ed Pinto. 

Read Full Article »
Posted: February 28th, 2018 | Permalink

Why Fix What Isn't Broken?

“We believe GSE ‘reform’ should simply formalize the current state of affairs— making the government guarantee explicit and ...keeping Fannie and Freddie functioning as they largely are today,” wrote PIMCO analyst. “...Congress should be honest about conservatorship: It has been and continues to be immensely successful, not to mention wildly profitable, and the current system works… Reform could be simple—and eminently doable. …[W]ith a few tweaks, …policymakers could …slowly shrink the government balance sheet and revive the private mortgage market—[without disrupting] one of the most functional markets in the world.”


Read Full Article »
Posted: February 23rd, 2018 | Permalink

Mortgage Modifications after the Great Recession

"The aftermath of the Great Recession was a particularly difficult period for many homeowners with a mortgage. The steep decline in home prices meant that by the end of 2011 many borrowers were “underwater”…[T]he unemployment rate nearly doubled and delinquency rates  ...spiked. In response, various mortgage modification programs were introduced to help homeowners struggling to make their monthly mortgage payments remain in their homes. ...We analyzed modifications to ...understand the impact of modifications on homeowner behavior."

Read Full Article »
Posted: December 6th, 2017 | Permalink

FHFA Finalizes Language Preference Question on Revised URLA

"With the exception of the additional information that will be provided to applicants regarding HUD-approved counseling agencies, requesting information about applicants’ language preferences is more likely to lead to confusion and uncertainty... Moreover, if the FHFA intends to use the collection of language preference information to require mortgage industry participants to provide more in language resources for LEP consumers, …[t]hese costs would likely be considerable—especially for many of the smaller players in the mortgage industry."

Read Full Article »
Posted: October 30th, 2017 | Permalink

Improving the 30-Year Fixed-Rate Mortgage

The 30-year fixed rate mortgage has three major flaws, according to Fed staffers Wayne Passmore and Alexander von Hafften. “First, because homeowner equity accumulates slowly during the first decade, homeowners are essentially renting their homes from lenders. …Second, in each monthly mortgage payment, homeowners substantially compensate capital markets investors for the ability to prepay. …Third, refinancing mortgages is often very costly. We propose a new fixed-rate mortgage, called the Fixed-Payment-COFI mortgage, that resolves these three flaws.” 

Read Full Article »
Posted: September 8th, 2017 | Permalink

August 2017 GSE Report

Moody’s Analytics projects loss in southeast Texas to be between $51 billion and $75 billion,with home and vehicle damage estimated at $30 billion to $40 billion. However, total losses could continue to rise as the storm moves into Louisiana. According to [Warren] Buffett, if those uninsured losses top $150 billion, there will be noticeable effects on the economy. “I don’t think it would be a full percentage point for a year or anything like that. But it has a real effect. It destroys wealth. If there’s $150 billion, or something, of uninsured losses that’s real wealth,” Buffett said on CNBC’s Squawk on the Street.


DS News

Brianna Gilpin

August 30, 2017

Read Full Article »
Posted: September 5th, 2017 | Permalink