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FHFA Prepared Remarks of Melvin Watt

Posted on September 13, 2018September 13, 2018 by Safeguard

On March 5, the Federal Housing Finance Agency (FHFA) released the prepared remarks of Melvin L. Watt at the Goldman Sachs Housing Finance Conference.

Prepared Remarks of Melvin L. Watt Director FHFA at the Goldman Sachs Housing Finance Conference

Remarks as Prepared for Delivery
Melvin L. Watt, Director
Federal Housing Finance Agency
Goldman Sachs Housing Finance Conference
New York, NY

It is a pleasure to be here with you this afternoon. Thank you for the opportunity to discuss the work underway at the Federal Housing Finance Agency (FHFA) to fulfill our statutory mandates, which include ensuring the safety and soundness of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks and ensuring liquidity in the housing finance markets.

It feels to me like I’ve been on the job as Director of the Federal Housing Finance Agency for a lot longer than one year. It probably feels that way to me because we’ve been really busy this past year, and I believe our work is moving things in the right direction. But, I also know we have a lot more to do. My remarks today focus on Fannie Mae and Freddie Mac (the Enterprises) and on some of the challenges in the housing finance market, how we’ve approached confronting some of those challenges in my first year on the job, and how we plan to approach them going forward.

The annual Conservatorship Scorecard is FHFA’s mechanism for laying out our priorities and expectations for the Enterprises and our means of providing transparency to the public about what we expect. While it took us a lot longer to release the 2014 Scorecard, FHFA released the 2015 Scorecard early in January of this year. The 2015 Scorecard continues to be structured around the same general goals we had in 2014: Maintain, Reduce, and Build.

Under our first major goal, Maintain, there are no surprises in 2015. On the single-family side, we simply want to continue two objectives:

Maintaining, promoting and expanding access to credit in a safe and sound manner; and
Continuing to improve the Enterprises’ loss mitigation and foreclosure prevention activities.

On the first objective, FHFA and the Enterprises made a lot of progress last year on improving access to credit. We did this by updating and clarifying the Representation and Warranty Framework used by the Enterprises to ensure that the loans they purchase meet their underwriting guidelines. We also updated the foreclosure timeline and compensatory fee methodology under which mortgage servicers are held accountable for meeting loss mitigation and foreclosure process standards. We believe that providing lenders greater certainty about when and under what circumstances they would be required to repurchase or take loans back onto their books and providing servicers updated guidelines about when they would be required to pay compensatory fees has moved the availability of mortgage credit in the right direction. We expect the Enterprises to continue these efforts in 2015.

We’ve also turned our attention to another important effort, updating and enhancing the Enterprises’ counterparty standards for mortgage servicers. Changes in the servicing industry have resulted in the growth of nonbank servicers and increased levels of mortgage servicing transfers. While FHFA and the Enterprises do not regulate servicers, it is extremely important for the Enterprises to clearly define and communicate their Seller/Servicer eligibility requirements.

To this end, FHFA recently released proposed minimum financial eligibility standards the Enterprises will require servicers to meet. The standards set minimum net worth requirements for all servicers who work with the Enterprises, as well as capital and liquidity requirements targeted specifically for nonbank servicers.

Strengthened Enterprise servicer counterparty standards will help improve access to credit by reducing market uncertainty about Enterprise expectations for mortgage servicer counterparties. Consistent with our normal process, FHFA is collecting extensive stakeholder feedback on the proposed guidelines, and we expect to be able to finalize these requirements in the second quarter of this year and have them become effective six months after they are finalized.

Under the Maintain portion of the Scorecard, we also want the Enterprises to continue to improve their loss mitigation and foreclosure prevention activities in 2015. Again, we made progress in 2014, and – in a number of ways – the housing and foreclosure crisis has evolved. However, meeting mortgage obligations and staying one-step ahead of foreclosure continues at crisis levels for many individuals and families across the country and in many neighborhoods. There are still many borrowers who have been delinquent on their loans for extended periods of time – sometimes more than two or three years. In fact, over half of all delinquent loans held or guaranteed by the Enterprises are at least one-year delinquent. As of the third quarter of last year, this subset of delinquent loans totaled almost 300,000 loans with an unpaid principal balance of approximately $54 billion.

Consequently, we have directed the Enterprises to make significant efforts in 2015 to reduce the number of severely delinquent loans they hold and to do so in a responsible way. The sale of non-performing loans (NPLs) is one of the key tools we believe the Enterprises can use to meet this Scorecard priority. By engaging in NPL sales, the Enterprises are able to transfer pools of severely delinquent loans to new buyers and servicers. When done in a responsible way, these new buyers and servicers will have the capacity, self-interest and track records to successfully provide foreclosure alternatives to borrowers who are seriously delinquent. While NPL sales will not prevent foreclosures in every instance, we do expect NPL sales to produce better outcomes for borrowers, on the whole, than the status quo.

In recent months, FHFA has been vigorously working to define and test requirements for future NPL sales that will set the right balance of supporting positive outcomes for borrowers and neighborhoods while also supporting positive financial outcomes for the Enterprises. Standards that encourage successful foreclosure alternatives – including loan modifications, short sales and deeds in lieu of foreclosure – will not only be better for borrowers but will also yield better economic outcomes for the Enterprises and for taxpayers compared to keeping seriously delinquent and non-performing loans on the Enterprises’ books.

Earlier this week, FHFA released new requirements for future NPL sales by Freddie Mac and Fannie Mae. These requirements build on FHFA’s review of two pilot NPL transactions conducted by Freddie Mac in recent months. These transactions involved approximately $1 billion in loans with average delinquency rates of more than two and a half years.

The new requirements will necessitate substantial outreach by the Enterprises to identify bidders who are willing and able to meet established modification and loss mitigation standards, which include evaluating borrowers who have pre-2009 loans for the alternatives to foreclosure offered through the U.S. Department of the Treasury’s Making Home Affordable program and having foreclosure as the last alternative in the loss mitigation waterfall. We are also requiring winning bidders to track and report what happens with borrowers so FHFA and the Enterprises can monitor and document the success of the program.

Our second 2015 Scorecard objective is to continue to Reduce risks to the taxpayers by increasing the role of private capital in the mortgage market. 2014 was a breakthrough year for the Enterprises’ single-family credit risk transfer program. What began as a handful of transactions during the second half of 2013 has evolved into programs of regular debt issuances that have gained broad market acceptance. These programs are known as STACR for Freddie Mac and CAS for Fannie Mae. The ability and willingness of the Enterprises to provide historical loan performance data has greatly enhanced the ability of the market to achieve pricing that both serves the interests of investors and allows the Enterprises to meet their financial objectives.

FHFA tripled the credit risk transfer requirement in the 2014 Scorecard compared to 2013, requiring each Enterprise to transfer a portion of credit risk on single-family mortgages with an unpaid principal balance of $90 billion compared to the $30 billion requirement in 2013. Both Fannie Mae and Freddie Mac significantly surpassed last year’s benchmark by executing credit risk transfer transactions on mortgages with a combined UPB of over $300 billion.

The Enterprises also made significant progress last year in refining their risk transfer transactions. In May 2014, Fannie Mae completed the first transaction providing credit protection on mortgages with loan-to-value ratios from 80 percent to 97 percent, and Freddie Mac completed its first transaction with LTVs between 80 to 95 percent in August 2014. Prior to that, both Enterprises had conducted transactions only for loans with LTVs between 60 to 80 percent.

In 2014, the Enterprises also offered transactions that targeted private capital in the insurance and reinsurance markets. Freddie Mac completed three reinsurance deals, and Fannie Mae completed one.

Building on this success, FHFA again increased the credit risk transfer requirement in the Enterprises’ 2015 Scorecard. Subject to market conditions, we expect Fannie Mae to complete transactions on single-family mortgages with an overall UPB of $150 billion, and Freddie Mac to complete transactions with an overall UPB of $120 billion. The 2015 Scorecard also imposes some different obligations in the risk transfer space:
First, we also want the Enterprises to continue to refine and innovate in their existing credit risk transfer structures. For example, Freddie Mac completed a STACR transaction earlier this year that transferred the first loss piece of credit risk to investors. This differs from other structured debt issuances where the Enterprises have held on to the first loss while transferring intermediate layers of credit risk to investors.
Second, we want the Enterprises to continue to develop methods of conducting credit risk transfers that involve working with different kinds of market participants. We think there is significant value in exploring different approaches and investors, because it could provide the Enterprises with a greater ability to transfer credit risk during changing market conditions.
Finally, we also want the Enterprises to increase their attention to diversity and inclusion in risk transfer transactions by engaging with minority-, women-, and disabled-owned businesses.

You can see that there should be multiple opportunities for private sector involvement in the risk transfer space in 2015. So, I hope I can count on many of you and the companies and investors you represent to take advantage of these opportunities to put more private capital to work. We welcome your input on how we can continue to make this happen and be mutually beneficial to you, the Enterprises and taxpayers.

Finally, let me spend the balance of my time talking about the Build component of the Enterprises’ 2015 Scorecard in which our objective is to continue to make progress on building a new securitization infrastructure for the Enterprises that is adaptable for use by other secondary market participants in the future. This means continuing our progress on the Common Securitization Platform (CSP) and on moving toward a Single Security. Both of these multi-year initiatives are highly interrelated. While we are making significant strides on both the CSP and the Single Security, I’d like to focus my comments today on the Single Security.

Last year was the first time that FHFA included the development of a Single Security as part of our conservatorship priorities for the Enterprises. Our objective in adding this multi-year project to the agenda is to improve overall liquidity in the market, which will not only be beneficial to the Enterprises and other market participants, but will also benefit borrowers. It would also benefit taxpayers by reducing Freddie Mac’s costs that result from the trading disparity between Freddie and Fannie’s securities.

During the past year, FHFA and the Enterprises have been engaged in a transparent process about a Single Security structure. To get feedback from stakeholders, FHFA released a Request for Input in August of 2014 in which we proposed certain features, disclosures, and processes to define how a Single Security could operate and how the transition to this new structure could take place. Since August, FHFA has been reviewing the responses we received and continuing conversations with stakeholders – including investors, trade associations, lenders, and regulators – about FHFA’s proposal and related issues.

As we move the process forward in 2015, a high priority will be to provide increasing levels of detail about the Single Security. In the feedback we received in response to our Request for Input and in our conversations with stakeholders, we heard the strong message that additional information and greater clarity is needed about security features and disclosure standards, about transitioning legacy securities to the Single Security, about the counterparty status of commingled re-securitizations, and about a range of other potential issues.

We heard these concerns, and we will provide more details in an update report that we expect to release in the second quarter of 2015. While the Single Security remains a multi-year initiative, we believe this update report will be a significant milestone in defining the structure and processes necessary to successfully transition to a Single Security in the future.

FHFA has also required the Enterprises to develop preliminary plans about how to implement the Single Security in the market. We expect this to be a particular focus for the Enterprises during the second half of the year. Just as we have approached the rest of our efforts on the Single Security, these implementation plans will not be developed in a vacuum. Instead, FHFA and the Enterprises will gather feedback and input from market participants as these plans develop and evolve.

What I have tried to do today is to provide some highlights just about the priorities included in the 2015 Scorecard. Of course, this just “scratches the surface” of the work we are doing at FHFA as regulator and conservator of Fannie Mae and Freddie Mac and as regulator of the 12 (soon to be 11) Federal Home Loan Banks. I’d be happy to take questions or comments about the things I have spoken about or about the other work we are doing. Thank you for the invitation to be with you today, and I look forward to your questions.

Contacts:
Corinne Russell (202) 649-303??2 / ? Stefanie Johnson (202) 649-3030

Please click here to view the prepared remarks online.

About Safeguard
Safeguard Properties is the mortgage field services industry leader, preserving vacant and foreclosed properties across the U.S., Puerto Rico, Virgin Islands and Guam. Founded in 1990 by Robert Klein and headquartered in Cleveland, Ohio, Safeguard provides the highest quality service to our clients by leveraging innovative technologies and proactively developing industry best practices and quality control procedures. Consistent with Safeguard’s values and mission, we are an active supporter of hundreds of charitable efforts across the country. Annually, Safeguard gives back to communities in partnership with our employees, vendors and clients. We also are dedicated to working with community leaders and officials to eliminate blight and stabilize neighborhoods. Safeguard is dedicated to preserving today and protecting tomorrow. Website: www.safeguardproperties.com.

FHFA Enhances Requirements for Freddie Mac and Fannie Mae Sales of Non-Performing Loans

Posted on September 13, 2018September 13, 2018 by Safeguard

On March 2, the Federal Housing Finance Agency (FHFA) published a news release announcing enhanced requirements for sales of non-performing loans by Freddie Mac and Fannie Mae.

FHFA Enhances Requirements for Freddie Mac and Fannie Mae Sales of Non-Performing Loans

FOR IMMEDIATE RELEASE

Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced enhanced requirements for sales of non-performing loans (NPLs) by Freddie Mac and Fannie Mae (the Enterprises). FHFA approved NPL sales by the Enterprises to reduce the number of severely delinquent loans held in their inventories and to transfer risk to the private sector.

“FHFA expects that with these enhanced requirements, NPL sales by Freddie Mac and Fannie Mae will result in more favorable outcomes for borrowers and local communities, while also reducing losses to the Enterprises and, therefore, to taxpayers,” said FHFA Director Melvin L. Watt. “Under the requirements announced today, servicers must consider borrowers for a range of alternatives to foreclosure,” Watt said.

Enterprise NPL sales are generally expected to include loans that are severely delinquent, such as loans that are more than a year past due. Under a pilot program, Freddie Mac sold severely delinquent loans through two transactions in the past six months – one in August 2014 covering $596 million of unpaid principal balance (UPB), and the other on February 5, 2015 covering $392 million of UPB. FHFA’s enhanced requirements for future NPL sales are based, in part, on a review of these initial sales as well as other considerations.

The requirements announced today are expected to encourage broad participation by potential investors and provide for future publication of aggregate data about borrower outcomes.

Link to Related Fact Sheet

Contacts:
Corinne Russell (202) 649-303??2 / ??Stefanie Johnson (202) 649-3030

Please click here to view the news release online.

FHFA Director Watt answers ?What?s going on with HARP??

Posted on September 13, 2018 by Safeguard

On March 5, HousingWire released an article offering some clarity on the possible future of the Home Affordable Refinance Program, which is set to expire in December 2015.

FHFA director Watt answers “What’s going on with HARP?”

Sets industry talks straight

After a town hall meeting on the Home Affordable Refinance Program in Newark, New Jersey on Wednesday, the housing market was left questioning if the program would be extended or possibly even expanded.

During the Goldman Sachs (GS) Housing Finance Conference Thursday, Federal Housing Finance Agency Director Mel Watt clarified, saying that he never intended to muddy the water yesterday.

This was the FHFA’s fifth event to reach homeowners who could save as much as $220 per month refinancing their home through HARP, with more than 20,000 New Jersey residents still eligible to take advantage of HARP.

Watt started the nationwide public campaign back in July 2014 to capture the remaining eligible homeowners who would benefit financially from HARP.

What was under debate after yesterday’s meeting was the program’s expiration date, which is set for December 2015.

Once the meeting ended, news report made people think that a HARP extension or expansion was in the works. And the industry was quick to ask Watt about it during the Q&A section of Watt’s speech at the conference.

Watt explained that what he was saying is that the FHFA doesn’t like to leave any option off the table, but that doesn’t mean that the agency is in any talks to pursue either an extension or expansion, just that anything is possible.

Please click here to view the article online.

FHFA AB 2015-03 Rescission of Division of Enterprise Regulation Guidance Documents

Posted on September 13, 2018 by Safeguard

On March 26, the Federal Housing Finance Agency (FHFA) released Advisory Bulletin AB 2015-03, titled Rescission of Division of Enterprise Regulation Guidance Documents.

Advisory Bulletin

Rescission of Division of Enterprise Regulation Guidance Documents

Number: AB 2015-03

Pertains To: Fannie Mae & Freddie Mac

ADVISORY BULLETIN

AB 2015-03

RESCISSION OF DIVISION OF ENTERPRISE REGULATION GUIDANCE DOCUMENTS

Purpose

The Federal Housing Finance Agency (FHFA) is issuing this advisory bulletin to rescind five examination guidance documents issued by the Office of Federal Housing Enterprise Oversight (OFHEO).

Background

In an effort to keep guidance related to the examination process current, FHFA regularly reviews outstanding guidance, including guidance issued by its predecessor agencies. As a result of the most current review, FHFA has determined that five guidance documents issued by OFHEO should be rescinded. These five guidance documents have been superseded by FHFA guidance, or restate regulations without providing additional guidance, or are no longer relevant or applicable in the current environment.

Guidance

This Advisory Bulletin rescinds:

PG-00-001: Minimum Safety and Soundness Requirements (12/19/2000)
PG-00-002: Non-Mortgage Liquidity Investments (12/19/2000)
PG-06-001: Examination for Corporate Governance (11/8/2006)
PG-06-003: Examination for Accounting Practices (11/8/2006)
PG-08-002: Standards for Enterprise Use of the Fair Value Option (4/21/2008)

??????Advisory bulletins communicate guidance to FHFA supervision staff and the regulated entities on specific supervisory matters pertaining to the Federal Home Loan Banks, Fannie Mae, and Freddie Mac. Contact Bobbi Montoya, Associate Director, Office of Supervision Policy at (202) 649-3406 or Bobbi.Montoya@fhfa.gov or Carol Connelly, Principal Examiner, Examination Standards Branch, at (202) 649-3232 or Carol.Connelly@fhfa.gov?, with comments or questions pertaining to this bulletin.

Please click here to view Advisory Bulletin 2015-03 [pdf].

Please click here to view Advisory Bulletin 2015-03 online.

FHFA AB 2015-02 Enterprise Fraud Reporting

Posted on September 13, 2018October 29, 2018 by Safeguard

On March 26, the Federal Housing Finance Agency (FHFA) released Advisory Bulletin AB 2015-02, titled Enterprise Fraud Reporting.

Advisory Bulletin

Enterprise Fraud Reporting

Number: AB 2015-02

Pertains To: Fannie Mae & Freddie Mac

ADVISORY BULLETIN

AB 2015-02

ENTERPRISE FRAUD REPORTING

Purpose

This advisory bulletin communicates to Fannie Mae and Freddie Mac (the Enterprises) the Federal Housing Finance Agency’s (FHFA) fraud reporting requirements pursuant to 12 CFR Part 1233 (FHFA Regulation).

This advisory bulletin rescinds and replaces FHFA’s Regulatory Policy Guidance RPG-2011-001, Reporting of Fraudulent Financial Instruments, dated March 2011.

Background

?The Housing and Economic Recovery Act of 2008 (HERA) subjects the Enterprises to fraud reporting (12 U.S.C. Section 4642) and requires an Enterprise to submit to FHFA a “timely” report upon discovery that it has purchased or sold a fraudulent loan or financial instrument, or when it suspects a possible fraud related to the purchase or sale of any loan or financial instrument.

The FHFA Regulation implements the timely reporting requirement of HERA (12 CFR Section 1233.3(a)(1)) and requires immediate notification to the Director of FHFA upon the discovery of any situation that would have a significant impact on an Enterprise (12 CFR Section 1233.3(a)(2)). The FHFA Regulation grants the Director authority to determine procedures by which the Enterprises will submit such reports (12 CFR Section 1233.3(b)).

Guidance

The Enterprises should adhere to the guidelines in this advisory bulletin for reporting fraud or possible fraud to FHFA in compliance with the FHFA Regulation and for super?visory oversight purposes.

Immediate Notification

To comply with the immediate notification requirement in the FHFA Regulation, an Enterprise should notify the Director’s designee(s) electronically, through secure methods established by FHFA, within one calendar day from when an Enterprise becomes aware of fraud or possible fraud as defined in the FHFA Regulation that may have a significant impact on the Enterprise. Fraud or possible fraud is considered to have a significant impact if it may create substantial financial or operational risk for the Enterprise, whether from a single event/incident or because it is systemic. Fraud or possible fraud is also considered significant if it involves a member of the board of directors, officer, employee, or a contractor temporarily engaged to fill a position or perform a particular function at an Enterprise or other individual similarly engaged by an Enterprise.

The Enterprise should provide periodic updates to its board of directors, or a committee thereof, of all fraud or possible fraud requiring immediate notification.

Timely Reporting

To comply with the timely reporting requirement in the FHFA Regulation, an Enterprise should adhere to the following two reporting requirements.

Monthly Fraud Status Report

The Enterprises should submit a monthly fraud status report to FHFA. The monthly fraud status report shall contain requested information for each occurrence during the month in which the Enterprise has:

1.Filed a suspicious activity report (SAR) with the U.S. Department of the Treasury, Financial Crimes Enforcement Network (FinCEN) or

2.Discovered that it has purchased or sold a fraudulent loan or financial instrument, or when it suspects a possible fraud related to the purchase or sale of any loan or financial instrument, and the Enterprise has not filed a SAR.

FHFA will provide a template that describes the format of the monthly fraud status report and defines the information to be included.

Each Enterprise should provide the Director’s designee(s) with the monthly fraud status report within ten (10) calendar days after the end of each month, regardless of whether the Enterprise has a reportable event during the period covered by the report. The report should be sent electronically through secure methods established by FHFA.

Quarterly Fraud Status Report

On a quarterly basis, the Enterprises should also report to FHFA the status of any entry required to be reported in the monthly fraud status report for which the Enterprise’s fraud unit has opened a case. The quarterly fraud status report shall include cases that (1) remain ongoing as of the quarterly report date or (2) were closed during the quarter covered by the report.

FHFA will provide a template that describes the format of the quarterly fraud status report and defines the information to be included.

Each Enterprise should provide the Director’s designee(s) with the quarterly fraud status report within ten (10) calendar days after the end of each calendar quarter. The report should be sent electronically through secure methods established by FHFA.

Effective Date

This advisory bulletin becomes effective on June 1, 2015. The RPG-2011-001 guidance for Immediate Notifications (Section II.A.), Fraud Reports (Section II.C.), and Quarterly Status Submission (Section II.D.) shall continue through the May 31, 2015 reporting period. All other requirements of RPG-2011-001 are discontinued immediately, including the Annual Review and Conformance Report. ??

Advisory bulletins communicate guidance to FHFA supervision staff and the regulated entities on specific supervisory matters pertaining to the Federal Home Loan Banks, Fannie Mae, and Freddie Mac. Contact Kari Walter, Senior Associate Director, Office of Supervision Policy at Kari.Walter@fhfa.gov, or Kathy Beach, Principal Advisor, Office of Supervision Policy at Kathy.Beach@fhfa.gov, with comments or questions pertaining to this bulletin.

Please click here to view Advisory Bulletin 2015-02 [pdf].

Please click here to view Advisory Bulletin 2015-02 online.

Fannie Mae SVC-2015-04 Servicing Guide Updates

Posted on September 13, 2018 by Safeguard

On March 18, Fannie Mae issued Servicing Guide Announcement SVC-2015-04, subtitled Servicing Guide Updates.

Servicing Guide Announcement SVC-2015-04

Servicing Guide Updates

The Servicing Guide has been updated to include the following:

Updates to the Use of Multiple Custodial Accounts
Updates to Property (Hazard) and Flood Insurance Losses
Updates to Delinquency Status Code Hierarchy and Definitions
New Requirements for Reimbursing Fannie Mae for a Cancelled Mortgage Loan Modification
Updates to Fannie Mae Standard and Streamlined Modifications
Updates to Notifying Fannie Mae of Changes to a Servicer’s Organization
Introduction of the Non-Routine Litigation Form (Form 20)

Please click here to view the announcement in its entirety.

Fannie Mae: Strong Job Growth Foreshadows Solid Full-Year Economic Growth

Posted on September 13, 2018 by Safeguard

On February 26, Fannie Mae issued a news release titled Strong Job Growth Foreshadows Solid Full-Year Economic Growth.

Strong Job Growth Foreshadows Solid Full-Year Economic Growth

Robust Hiring and Firming Income Growth Expected to Boost Housing Recovery

WASHINGTON, DC – The economy is poised for a pickup in growth in 2015 amid a strengthening employment sector, rising income growth, and declining commodity prices, according to Fannie Mae’s (FNMA/OTC) Economic & Strategic Research (ESR) Group. The labor market has started the year on an upbeat note and is expected to lift consumer confidence, in turn helping to boost consumer spending, manufacturing activity, and the pace of the housing recovery. Economic growth may face some headwinds as a strong U.S. dollar weighs on the trade deficit. However, the economy is expected to climb to 2.9 percent for the full year, up from 2.5 percent growth in 2014.

“Our forecast calls for an increase in economic growth to 2.9 percent for 2015, which is a slight downward adjustment from our prior forecast but solid improvement nonetheless,” said Fannie Mae Chief Economist Doug Duncan. “Although we are beginning this year at a more modest pace compared to the above-trend numbers seen at mid-year 2014, the country’s aggregate income has benefitted from the improving labor market, which, combined with low gasoline prices, should help drive higher auto sales and overall consumer spending throughout 2015.”

“We expect housing to shift up a gear in 2015 following the uneven and ultimately disappointing activity last year,” said Duncan. “Our forecast calls for a number of factors, including strong hiring and income growth, stabilized housing affordability, and modestly easing lending standards, to translate into improving housing demand throughout the year. We continue to anticipate that the Fed will begin to hike short-term interest rates later this year, although weak global economic growth and geopolitical headwinds will likely limit the rise in long-term interest rates. We expect total home sales to increase by approximately 6.0 percent for 2015, with total single-family mortgage production climbing to approximately $1.2 trillion. Total single-family mortgage debt outstanding should be relatively flat this year before picking up gradually in 2016 and 2017.”

Visit the Economic & Strategic Research site at www.fanniemae.com to read the full February 2015 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary.

Please click here to view the news release online.

Fannie Mae RVS-2015-01 Reverse Mortgage Loan Servicing Manual

Posted on September 13, 2018 by Safeguard

On March 25, Fannie Mae issued Servicing Guide Announcement RVS-2015-01, subtitled Reverse Mortgage Loan Servicing Manual.

Servicing Guide Announcement RVS-2015-01

Reverse Mortgage Loan Servicing Manual

Fannie Mae is updating its policies and requirements in the Reverse Mortgage Loan Servicing Manual (Reverse Manual) 5-01, Submitting the REOgram and 6.1-01, Reporting Specific Transactions to require the servicer to report a valid eBoutique Action Code within 24 hours after the date of a foreclosure sale or the execution of a deed-in-lieu of foreclosure for all reverse mortgage loans.

Additionally, Reverse Manual 5-05, Property Management and 5-06, Submitting Special Remittances (formerly 5-02, Submitting Special Remittances) have been updated as follows:

Clarifies the servicer’s responsibilities regarding Home Keeper mortgage loans with respect to the hazard insurance; and
For home equity conversion mortgages (HECMs),requires the servicer to place an REO hazard insurance policy upon completion of the foreclosure sale and outlines the servicer’s responsibilities regarding:
Documentation of REO hazard insurance claims;
Cancellation of the REO hazard insurance policy;
Reimbursement of REO hazard insurance premiums; and
Remittance of insurance loss proceeds.

Policy Change Effective Date

The servicer is encouraged to implement these policy changes immediately; however, the servicer must implement these policy changes no later than April 1, 2015.

Date of Servicing Guide Update

The content as shown in this Announcement will be reflected in the April 2015 update of the Reverse Manual.

The servicer should contact its Reverse Mortgage Loan Servicing Representative in Fannie Mae’s National Servicing Organization’s Servicer Support Center at 1-888-FANNIE5 (1-888-326-6435) with any questions regarding this Announcement.

Malloy Evans
Vice President
Credit Portfolio Management

Please click here to view the announcement online.

Fannie Mae Introduces New Non-Routine Litigation Form

Posted on September 13, 2018 by Safeguard

On March 11, Fannie Mae introduced a new Non-Routine Litigation Form (Form 20).

Fannie Mae Introduces New Non-Routine Litigation Form

Fannie Mae is updating the process for submitting non-routine legal matters to Fannie Mae. Previously when reporting a non-routine legal matter, the servicer or law firm was required to send an email to the Non-Routine Litigation mailbox.

Effective March 23, 2015, the servicer or law firm must fill out the Non-Routine Litigation Form (Form 20). Once the form is completed with all the relevant information, the servicer or law firm must click on the “Submit” button and an email will open with the “To” line automatically populated with the regional Fannie Mae in-house counsel that will serve as your point of contact on the matter. When submitting Form 20, please note that all items denoted with an asterisk mark (*) are required before the form can be submitted.

Form 20 may be obtained by sending an email to nonroutine_litigation@fanniemae.com. The sender will receive an auto-reply message advising them to follow our new process and a link to the form will be embedded in the body of that email. Servicers and law firms may also access the form by visiting our website.

Please click here to view the Fannie Mae Single-Family Loans web page.

Fannie Mae: Consumer Optimism Toward the Economy Reaches New All-Time Survey High

Posted on September 13, 2018 by Safeguard

On March 9, Fannie Mae published a release titled Consumer Optimism Toward the Economy Reaches New All-Time Survey High.

Consumer Optimism Toward the Economy Reaches New All-Time Survey High

Expected Ease of Getting a Mortgage Also Hits Record High as Overall Housing Sentiment Holds Steady

WASHINGTON, DC – Amid continued strengthening in employment, consumer optimism toward the economy is growing and appears to be contributing to further improvement in overall housing sentiment, according to results from Fannie Mae’s February 2015 National Housing Survey™. The share of respondents who believe the economy is headed in the right direction increased 3 percentage points last month to an all-time survey high of 47 percent, while the share who believe it is headed in the wrong direction decreased to 45 percent, a new survey low. Additionally, the share who believe it would be easy to get a home mortgage today increased to a record-high 54 percent while a survey low 43 percent think it would be difficult to get a mortgage.

“Continuing improvements in consumer attitudes in this month’s National Housing Survey lend support to our expectation that 2015 will be a year of the economy dragging housing upward,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The share of consumers who think the economy is on the right track rose to a record high since the inception of the survey nearly five years ago and for the first time exceeded the share who believe it’s on the wrong track. Consumer confidence seems to be getting a boost from employment growth. This is reflected in their views on the ease of getting a mortgage today, which also reached a survey high in February. We continue to see strength in attitudes about the current home buying and selling environment and consistently high shares of consumers saying they expect to buy a home on their next move. At the same time, we still need to see further growth in consumer optimism toward personal finances and income for more robust improvement in housing market attitudes.”

SURVEY HIGHLIGHTS

Homeownership and Renting

The average 12-month home price change expectation remained at 2.5 percent.
The share of respondents who say home prices will go up in the next 12 months fell to 46 percent. The share who say home prices will go down fell to 6 percent.
The share of respondents who say mortgage rates will go up in the next 12 months increased back to 48 percent.
Those who say it is a good time to buy a house remained at 67 percent. Those who say it is a good time to sell decreased by 4 percentage points to 40 percent.
The average 12-month rental price change expectation increased to 4.0 percent.
The percentage of respondents who expect home rental prices to go up in the next 12 months remained at 52 percent.
At a survey high of 54 percent of respondents think it would be easy to get a home mortgage today, while the share saying it would be difficult to get a mortgage fell 4 percentage points to 43 percent—a survey low
The share who say they would buy if they were going to move fell 1 percentage point to 65 percent, while the share who would rent remained at 29 percent.

The Economy and Household Finances

The share of respondents who say the economy is on the right track increased by 3 percentage points to 47 percent—an all-time survey high, coupled with a survey low of 45 percent of those saying the economy is on the wrong track.
The percentage of respondents who expect their personal financial situation to get better over the next 12 months fell to 46 percent.
The share of respondents who say their household income is significantly higher than it was 12 months ago fell 5 percentage points to 24 percent.
The share of respondents who say their household expenses are significantly higher than they were 12 months fell to 31 percent.

The most detailed consumer attitudinal survey of its kind, Fannie Mae’s National Housing Survey™ polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010). To reflect the growing share of households with a cell phone but no landline, the National Housing Survey has increased its cell phone dialing rate to 60 percent as of October 2014. For more information, please see the Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.

For detailed findings from the February 2015 survey, as well as technical notes on survey methodology and questions asked of respondents associated with each monthly indicator, please visit the Fannie Mae Monthly National Housing Survey page on fanniemae.com. Also available on the site are in-depth topic analyses, which provide a detailed assessment of combined data results from three monthly studies. The February 2015 National Housing Survey was conducted between February 1, 2015 and February 23, 2015. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

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