January 18, 2018

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

Federal Housing Policy

Top Democrats Want Credit Reporting Agencies Severely Punished for Equifax-style Breaches 

Two Senate Democrats want there to be much stiffer penalties should any credit reporting        agency, Equifax included, fail to protect consumer data again. On Wednesday, January 10, Sens. Mark Warner, D-Virginia, and Elizabeth Warren, D-Mass., introduced a bill that would increase oversight of credit reporting agencies and allow the government to impose financial penalties on the agencies for failing to secure consumer data.

Financial Services Groups Ask Congress to Pursue New Data Breach Rules

The trade groups that represent the financial services companies impacted by the Warner-Warren bill are also asking for the government to enact new data security rules. In a letter sent to House Energy and Commerce Committee Chairman Rep. Greg Walden, R-Oregon, and Rep. Bob Latta, R-Ohio, the chairman of the House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection, a collection of 22 trade groups say that they support new data security legislation because their member companies take data security “very seriously. The groups also lay out their vision for how that data security legislation should look.

Former FHA Head Joins Calls for Reverse Mortgage Separation

There continues to be concerns about the negative impact that reverse mortgages are having on FHA’s capital reserves. Carol Galante, former head of FHA, is among the growing chorus of housing experts who believe the federally backed reverse mortgage program should be separate from the Federal Housing Administration’s other loans.

MBA Calls for Improved Policing of VA Loan “Churning”

There is growing concern in Congress about serial cash-out refinancings of mortgage loans to veterans through the VA program. Mortgage Bankers Association Chairman David Motley, in testimony before a House subcommittee, said lenders who engage in serial refinancing ("churning") of Veterans Affairs loans run counter to sound lending practices and expressed support for measures that result in stronger policing of such practices.

Bill Would Rein in Mortgage Companies Targeting Veterans

U.S. Sens. Elizabeth Warren and Thom Tillis have introduced a bill aimed at cracking down on mortgage lending companies targeting veterans, and say the measure is gaining support.

Homeownership Programs

HousingWire—Student Loan Crisis Could be Worse Than Originally Thought

In response to the release of a new study by the Brookings Institute regarding the scope of the student loan default “crisis” (see  below), HousingWire conducted further analysis to determine the potential scope of negative impacts on the first-time home purchase market.

Brookings—The Looming Student Loan Default Crisis is Worse Than We Thought
This report analyzes new data on student debt and repayment, released by the U.S. Department of Education in October 2017. Previously available data have been limited to borrowers only, follow students for a relatively short period (3-5 years) after entering repayment, and had only limited information on student characteristics and experiences. The new data allow for the most comprehensive assessment to date of student debt and default from the moment students first enter college, to when they are repaying loans up to 20 years later, for two cohorts of first-time entrants (in 1995-96 and 2003-04).

The Unintended Effect of New Tax Laws on Property Tax Servicing

The Tax Reform Bill, which caps the amount of state and local taxes that can be withheld, has caused disruption of mortgage escrow accounting protocols for some servicers in high housing cost/property tax areas, including Northern Virginia, where borrowers have attempted to pre-pay their tax liability.

State of U.S. Interest Rates, Broken Down by Credit Scores

Most tracking of mortgage interest costs focus on average rates such as reported weekly by Freddie Mac. However, actual rates paid vary significantly by credit score. LendingTree recently conducted a study which analyzed the actual rates lenders offered to borrowers to see the average interest rate broken down by credit scores.

A New Approach to Mortgage Design

Since the mortgage crisis, there has been growing interest in mortgage structures that accelerate equity growth for borrowers. Currently, the GAO is studying the issue at the request of Congress.  This article lays out one conceptual approach for achieving this goal.

Demographic Trends Impacting Housing

What is the Biggest Demographic Trend in Virginia?

Behind all of the demographic trends being tracked and reported on by the Demographics Research Group at UVA, there is one significant driving factor: aging. The aging of Baby Boomers is not only swelling the 65+ population, but is also having a ripple effect across all age groups, slowing growth in the working-age population and often causing decline in the school-age population. This report summarizes UVA’s findings regarding this trend.

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