- Fannie Mae announced HomeReady – a new affordable lending product which will be rolled out later in the year. The program includes features designed to make it more flexible for lenders and buyers alike. For lenders Desktop Underwriter (DU) allows lenders to make credit risk, eligibility and loan availability assessment in one tool. HomeReady loans also promise simplified execution due to the ability to commingle them with standard loans into Mortgaged Backed Security polls. Purchasers are able to put as little as 3% down, and are able to use rental income from the property and non-borrower household income to meet the requirements.
Author Archives: Serenna McCloud
Thursday’s Advocacy & Think Tank Round-Up
- Affordable Rental Housing A.C.T.I.O.N. (A Call to Invest in Our Neighborhooods) has released both a National Fact Sheet and State specific Fact Sheets on the impact of the Low Income Housing Tax Credit Impact (LIHTC), which it characterizes the LIHTC as “the most effective affordable housing production tool.” The National Fact sheet indicates among other things that 2,798,776 units were developed or preserved via the LIHTC. The New York State Fact Sheet, in particular, indicates that 2,357,234 New York households pay more than half of their income in rent (a data point which is included for all states).
- The New York Federal Reserve’s interactive Home Price Index Tool maps overall changes in home prices across localities of the United States as compared to the previous month – the data is current from June 2007 through June 2015.
- The Urban Institute has published, Charted: How Housing Policy Impacts Inequality in which it charted a correlation between housing benefits and income inequality. Their findings indicate that when these benefits go to the well of in the form of the mortgage interest deduction and real estate tax deduction inequality increases. On the other hand, federal housing benefits to the poor decrease inequality.
Tuesday’s Regulatory & Legislative Round-Up
- The Consumer Financial Protection Bureau (CFPB) has released a series of guides to managing someone else’s money or property in Virginia. There are four separate guides which cover: revocable living trusts, power of attorney, representative payees and fiduciaries, and court appointed conservators.
- The Federal Housing Finance Agency (FHFA) has released its Final Government Sponsored Entity (GSE) Affordable Housing Goals for 2015 – 2017. The Affordable housing goals apply to categories of mortgages including single family purchases, multifamily units with affordable rental units. The goals are expressed in percentages by income level.
- The FHFA has also proposed Amendments to the Stress Testing Rules to implement section 165(i) of the Dodd-Frank Wall Street Reform and Consumer Protection Act for FHA regulated entities including the GSEs, Fannie Mae and Freddie Mac. The Amendment would change the start of the stress testing cycle and the time frame for the FHFA to provide worst case scenarios by which the regulated entities would conduct testing and report results to the FHFA.
Friday’s Government Reports
- The Department of Housing and Urban Development (HUD) and the Census Bureau have released July’s New Residential Construction Statistics. According to the federal agencies building permits are up 7.5% over last July, while housing starts are up 10.8% and completions are up 14.6% during the same period.
Thursday’s Advocacy & Think Tank Round-Up
- Community Builders, an initiative of the Sonoran Institute has released Place Value: How Communities Attract, Grow and Keep Jobs and Talent in the Rocky Mountain West recommends walkability and quality of life conscious development of communities .
- According to the National Association of Realtor’s analysis of the New Housing Starts data homebuilders are increasingly developing high density housing with “walkability” suburban and single family housing has been deemphasized.
- The Urban Institute released its Housing Finance at a Glance monthly chartbook, which Prof. Reiss finds to be a very helpful holistic view of the mortgage industry.
- The U.S. Department of Housing and Urban Development (HUD)’s Office of Policy Development and Research has developed the Creating Connected Communities: A Guidebook for Improving Transportation Connections for Low and Moderate Income Households in Small and Midsize Cities – the guidebook contains recommendations geared toward cities with 250,000 or fewer residents which among other things suggest a refocus of financial resources on critical needs and improvement of the alignment between housing and transportation investments.
- Zillow has announced that home prices are rising faster than incomes for most Millenials (no surprise there). This report also finds that first time home buyers rent for longer before buying typically more expensive homes which are paid for with a larger share of income.
Tuesday’s Regulatory & Legislative Round-Up
- The Consumer Financial Protection Bureau has launched an Online Guide for Real Estate Professionals to understand their obligations under the new “Know Before You Owe” mortgage disclosure rules, which become effective October 3, 2015. The Know Before You Owe mortgage initiative is designed to empower consumers with the information they need to make informed mortgage choices. It includes the implementation of the TILA-RESPA (Truth in Lending Act – Real Estate Settlement Procedures Act) Integrated Disclosure rule. The new rule primarily does two things, first it consolidates some of the disclosures that must be made unto fewer forms and second it changes the timing of certain activities in the mortgage lending process.
- Fannie Mae and Freddie Mac have announced an auction of Non-Performing Loans (NPLs) in the amount of 1.2 billion and provided details for bidder pre-qualification and servicer requirements. The reasons for the program are fourfold: 1. reduce illiquid assets, 2. encourage broad investor participation; 3. consider borrower outcomes; 4. a well controlled transparent process.
- The New York City Council has passed three Tenant Buyout Bills which were designed to protect tenants from landlords who want them out of rent stabilized apartments.
- The Bills are: Intro 682 – buyout offered in a threatening manner are an act of harassment. This includes untoward language, odd hour contact, frequent contact, and abusive contact.
- Intro 700 – requirement of a writing to memorialize the buyout offer, this writing must include important facts including the tenant’s right to seek legal representation and the right to refuse.
- Intro 757 – Bars repeated buyout offers by making such behavior a form of harassment when the tenant has indicated she/he is not interested.
Thursday’s Advocacy & Think Tank Round-Up
- The Institute of Housing Studies at DePaul University has issued a report analyzing foreclosure activity which finds that foreclosures are down in the Chicago area in 2014. The report also finds that mortgage activity remains low while investor buyers have become a major factor in the single family market.
- Miami Coalition for the Homeless has proposed a set of solutions to make housing in Miami affordable. The prosed policy changes grew out of a cross sector symposium dubbed the 2015 Housing Summit – organized to promoting the creation and maintenance of affordable housing in Miami-Dade County, where 71% of monthly household income goes to housing and transportation.
- The National Association of Realtors (NAR) would like to see the Federal Housing Authority (FHA) increase National Loan Limits. The National Loan Limit sets the individual loan limits available under the Government Sponsored Entities (Fannie and Freddie) and FHA and VA loan programs. In a comment letter to the FHA NAR argues that since housing prices have rebounded following the financial crisis – now expected to surpass 2007’s prices, increases are in order.
