January 31, 2017

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

Affordability is Housing Market’s Greatest Obstacle in 2017: Fannie Mae 

Fannie Mae warns that political uncertainty and rising affordability challenges could limit U.S. housing growth in 2017. U.S. housing market conditions are expected to remain resilient in 2017, but policy uncertainty and rising affordability challenges will put a cap on growth, Fannie Mae said in its new forecast. “Policy changes under the new Administration – in its nature, sequencing, and magnitude – will determine the direction of economic growth in 2017,” Fannie Mae Chief Economist Doug Duncan said in a statement released January 20. Adds Duncan, “We expect housing to remain resilient and continue its recovery in 2017, with affordability standing out as the industry’s greatest obstacle, particularly for first-time homeowners.”

FHFA Seeks Public Comment on GSE Chattel Loan Pilots 

The Federal Housing Finance Agency (FHFA) published a request for public input on possible Fannie Mae and Freddie Mac pilot programs that support financing for manufactured housing loans titled as real property, known as chattel loans. This request is being issued as part of FHFA's implementation of its Enterprise Duty to Serve Rule. As NCSHA previously reported, the Duty to Serve rule requires Fannie Mae and Freddie Mac to support lending for housing for low-income families in three underserved segments of the housing finance market: manufactured housing, affordable housing preservation, and rural areas. Regarding manufactured housing, both firms will be expected to adopt policies that help borrowers earning 100 percent of area median income or below purchase manufactured housing loans. As part of these efforts, Fannie Mae and Freddie Mac will be eligible to receive Duty-to-Serve credit for purchasing chattel loans, a market segment neither firm is currently involved with.

What Dow 20,000 Means for Mortgages

The Dow Jones Industrial Average crossed the 20,000 threshold for the first time, but the post-election stock market rally has produced a mixed bag for mortgage demand and the industry's publicly traded companies. The stock market gains reflect growing confidence in the overall economy. That suggests appetite for home loans will be higher, but could make mortgages less affordable. The government bond yields that drive mortgage rates typically increase as stock prices rise. That's because as investors put more money into stock markets, they tend to shift it away from bond markets. When bond prices fall, their yields rise.

CFPB’s Final Mortgage Servicing Rule Implementation Possibly Delayed

Possibly delayed 60 days for review by Trump administration
The implementation date of the Consumer Financial Protection Bureau’s final mortgage servicing rule lies in question after the Trump administration announced a freeze on federal regulations. After a nearly four-month delay since the CFPB finished the final mortgage servicing rule, the Office of the Federal Register finally published the rule on Oct. 19, meaning it would go into effect one year later on Oct. 19, 2017. While the extra time to adjust to the rule isn’t a bad thing, Nanci Weissgold, a member of Alston & Bird’s Financial Services & Products Group, said, “Given the operational complexities in implementing these rules, servicers should not delay in understanding the requirements and developing an implementation plan.”
The implementation date, however, could be delayed even further due to the regulatory freeze announced by Reince Priebus, assistant to the president and chief of staff.

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