December 1, 2015

In Case You Missed It: A Look at Recent National Housing Policy News

Moody's Report Predicts Stable Outlook for State HFAs in 2016 

Moody's Investors Service (Moody's) released a report predicting a stable financial outlook in 2016 for state HFAs. The report concludes that the continued growth of state HFAs median margins (net revenue/total revenue) and strong loan production indicates a stable outlook for fiscal year (FY) 2016. Moody's says HFAs must begin to rebuild their balance sheets by adding more mortgage loan assets to their portfolios to achieve a positive outlook.  In FY 2014, HFAs' median margins reached a post-crisis high, surpassing 12 percent. Moody's predicts this upward trend will continue in FYs 2015 and 2016. According to the report, while the trend will continue, median margins will not surpass 15 percent because short-term interest rates will not have an impact until later in FY 2016. The report places an emphasis on HFAs' margins, explaining that margins between 10 and 15 percent support a stable sector outlook, while margins over 15 percent can indicate a positive outlook, and margins under 10 percent could drive a negative outlook.

2016 Maximum Conforming Loan Limits Established for Fannie Mae and Freddie Mac 

National Baseline Loan Limit Remains Unchanged; Limits Rise for 39 High-Cost Areas
The Federal Housing Finance Agency (FHFA) today announced that the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2016 will remain at existing levels, except in39 high-cost counties where they will increase. In most of the country, the loan limit will remain at $417,000 for one-unit properties.  The Housing and Economic Recovery Act of 2008 (HERA) established the baseline loan limit at $417,000 and mandated that, after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels. The $417,000 loan limit will stay the same for 2016 because FHFA has determined that the average U.S. home value in the third quarter of this year remained below its level in the third quarter of 2007.

Quicken Loans debuts 8-minute mortgages, without humans

Detroit-based Quicken Loans has unveiled a new self-service website aimed at speeding up the mortgage approval process and cutting down the need to talk with a human loan officer.  The new Rocket Mortgage website allows prospective borrowers to start and finish a mortgage application entirely online and get approved in as little as eight minutes, the company said last week. A pioneer in Internet-based mortgage lending, Quicken Loans has traditionally let borrowers begin their application process online and get loan quotes, but it still required a call at some point with a live Quicken employee.
"This is a massive sea change in the home-lending world," said Dan Gilbert, founder and chairman of Quicken Loans. "I'm not aware of any other lender where you can apply for your mortgage, look up your interest rate, become automatically approved and have interfaces into assets, income and property values" all online, he said.

Fannie Mae joins e-document revolution

Partners with DocuSign, will offer e-signatures for several documents
The government-sponsored enterprise announced that it is partnering with DocuSign to provide an “easy, fast, and secure way” to execute agreements with Fannie Mae by allowing electronic signatures on several of its documents.  The new e-document process will also allow for the electronic tracking and handling of documents, Fannie Mae said.   Fannie Mae made the announcement in an email on Tuesday sent to lenders and servicers.  According to Fannie Mae, the new e-signature process will roll out in early December.   In its initial phase, Fannie Mae will implement e-signatures for its lender master agreements, master selling and servicing contracts, and “certain custodial documents.”

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