Insights on Instability and Children's Development: Commentaries from Practitioners, Policymakers, and Researchers Posted: July 22, 2014
Concern is growing about the damage that instability can do to children's healthy development. However it has emerged separately across different domains, with little focus on the pervasive and interconnected nature of the issue or on possible cross-cutting policy solutions. In November 2013, the Urban Institute convened policymakers, practitioners, and researchers to discuss the implications of instability for children's development, as well as what we know, need to learn, and need to do across research, policy, and practice. This paper contains essays from some of the meeting participants; a companion report includes the insights from the conference.
VA Loans Outperform FHA Loans. Why? And What Can We Learn?
, , Posted: July 16, 2014
Veterans Administration (VA) loans have consistently performed better than Federal Housing Administration (FHA) loans. In this commentary, we take a closer look at both programs to identify why VA loans perform better. We conclude that the residual income test may be a critical differentiating factor and suggest that regulators evaluate whether the test might be a good supplement to FHA’s current assessment of a borrower’s ability to pay.
Supplementing the Compare Ratio Posted: June 09, 2014
The FHA has been taking actions to reduce lender overlays, enhancing access to credit. Among these measures is the introduction of Supplemental Performance Metrics, to accompany the inflexible Lender Compare Ratios. In this article we reiterate the need for this type of metric, applaud the FHA for proposing it, and suggest a slight variation to make it even more effective.
Why the GSEs Need Congress to Exit Conservatorship Posted: May 30, 2014
Urban Institute fellow Jim Parrott and guest Jim Millstein discuss the prospect of long-term administrative reform of Fannie Mae and Freddie Mac. The discussion begins with Parrott's commentary, "Why Long-Term GSE Reform Requires Congress" and continues with Millstein's blog post, "It's time for administrative reform to end the GSE conservatorships."
A Strong Pivot from the New Director of FHFA Posted: May 13, 2014
After Congressman Mel Watt was sworn in as the Director of the Federal Housing Finance Agency on January 6 of this year, he offered a few words of thanks and assurance and then promptly disappeared from the scene. This week, Director Watt broke the silence, giving his first major public speech as director. For the remarks, see here. Signaling the importance and range of his inaugural remarks, Watt used them to announce a revision of the agency's Strategic Plan and Scorecard, the policy documents that together provide both the vision of the agency and a set of incentives to push the leadership of Fannie Mae and Freddie Mac (the enterprises or the GSEs) to fulfill that vision.
Johnson Crapo GSE Discussion Draft
, Posted: April 14, 2014
Over the past several years, a consensus has developed on the goals of GSE Reform: preserve the liquidity of the mortgage market while protecting the taxpayer by putting private capital in a first loss position, retain wide access to long-term fixed rate mortgages, provide access and equity for lenders of all sizes, and support affordable housing. Senators Tim Johnson (D-SD) and Mike Crapo (R-ID) released new draft legislation in March 2014 striving to achieve these goals. While this bipartisan proposal is a major step forward for housing finance reform, we suggest improvements in two critical areas: the structure of the private capital in the first loss position and the affordable housing incentive fee provisions. In both cases, the system as proposed has intellectual appeal, but is apt to have unintended and undesirable consequences.
National Mortgage Settlement
, Posted: April 14, 2014
In early 2012, the nation’s five largest mortgage servicers entered into a $25 billion settlement with the Department of Justice, Department of Housing and Urban Development, and 49 state Attorney Generals. This settlement, which addresses questionable servicing practices, was the largest joint state-federal civil settlement in US history. As a result, Bank of America, Citi, JP Morgan Chase, Rescap/Ally and Wells Fargo have since dispersed more than $50 billion in gross relief to over 600,000 families. In this commentary, we examine each servicer’s strategies in providing relief to borrowers, consider how those actions were impacted by the settlement's crediting system, and suggest improvements for future settlements.
Housing Finance At A Glance: A Monthly Chartbook
, , , , , , , , , Posted: April 15, 2014
At A Glance, the Housing Finance Policy Center's monthly chartbook, provides timely metrics on the state of the housing market and examines public policy's role in housing finance. April's issue includes a special quarterly feature on GSE loan performance and new numbers on the Federal Reserve's activity in the mortgage market.
OASIS: A Securitization Born from MSR Transfers
, Posted: April 01, 2014
Early in 2014, Ocwen Loan Servicing, the nation’s largest nonbank mortgage servicer, completed a new type of quasi-securitization to help Ocwen fund its servicing business, which has grown as mortgage servicing has shifted from depository institutions to nonbanks. This shift has occurred in response to Basel III regulations, which make it more costly than in the past for large banks to hold mortgage servicing rights. In this commentary, we describe the changing mortgage servicing market and the reasons for those changes. We then look at Ocwen’s new security, its purpose, and its appeal to investors.
Lifting the Fog around FHA Lending? Posted: March 13, 2014
The Federal Housing Administration (FHA) is taking new steps to encourage lenders to extend credit to first-time homebuyers and other traditionally underserved borrowers. Jim Parrott explains the problem that has constrained FHA lending in recent years and how the FHA is attempting to solve it.