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» FHFA AND CFPB UNITE TO CREATE FIRST NATIONAL MORTGAGE DATABASE The mortgage market may be the largest provider of consumer finance products, but it lacks any kind of comprehensive, centralized repository of records, according to the Federal Housing Finance Agency (FHFA) and Consumer Financial Protection Bureau (CFPB). For this reason, the federal agencies are coming together to create a national mortgage database. The database will become the "first comprehensive repository of detailed mortgage loan information," according to the agencies. Although federal and state regulatory bodies collect lending and market information, there isn't a collective center for housing all of the information. "In order to understand what is going on in the mortgage marketplace and develop appropriate consumer protections, we must have the best facts and data," said Richard Cordray, CFPB director. "This database will be a valuable tool for regulators and researchers and we look forward to partnering with FHFA on this important work." The information in the database will cover the life cycle of a loan starting with origination and span through servicing. Borrower profiles, payment history, and the mortgage product and terms will be included in the database, which will be updated monthly and date back to 1998. In a public statement, the agencies assured the industry and consumers that the database will not contain information that might give away the identities of borrowers. The agencies provided examples of ways the database will support their work, one of which includes the ability to monitor the health of the market. Through the database, the agencies can know how mortgages are performing and access information on loan modifications, foreclosures, and bankruptcies. The agencies will also be able to monitor new products, view liens, and obtain information on borrowers' other debt obligations. The database also enables FHFA to conduct a monthly mortgage market survey, which is a requirement under the Housing and Economic Recovery Act of 2008 (HERA). VISIT US ONLINE @ DSNEWS.COM CONSUMERS EXPECT HIGHER HOME AND RENT PRICES IN FANNIE MAE SURVEY The positive outlook on home prices strengthened further in Fannie Mae's most recent housing survey. In the October survey, respondents raised their expectation for home price growth in the next 12 months to 1.7 percent, up from 1.5 percent in September. In October 2011, consumers expected prices to fall by 0.3 percent. In addition, only 10 percent of respondents expect home prices to drop during the same one-year period, while 36 percent say prices will go up and 48 percent say they will stay the same. "This has been a year of steady growth in the percentage of consumers with positive home price expectations," said Doug Duncan, Fannie Mae's chief economist. Consumers placed even more confidence in rent prices, stating they expect prices to rise by an average of 3.9 percent in the next 12 months, up from 3.1 percent in September. A mere 3 percent expect rent prices to go down, and 50 percent expect rent prices to move higher. "Increasing household formation, encouraged by an improving labor market, is adding additional momentum to the housing recovery and putting upward pressure on rental price expectations. Expected increases in both owning and renting costs may encourage more consumers to buy and add further strength to the housing recovery already under way," Duncan added. Even though home prices have been on the rise, a large majority of consumers still think it's a buyer's market, with 72 percent stating now is a good time to buy. If respondents were to move, 66 percent said they would buy, a drop of 3 percentage points from the month before. Less than a third, 29 percent, say they would rent. After a steep decline in September, the percentage of respondents who say mortgage rates will go up rose to 37 percent in October from 33 percent the month before. Only 7 percent believe rates will continue to fall. Most respondents, 56 percent, say they think the economy is heading in the wrong direction, while 38 percent believe the economy is on the right track. Less than half, or 43 percent of respondents, expect their financial situation to improve in the next 12 months, while 13 percent expect their situation to worsen. Nineteen percent of respondents reported significantly higher household income compared to 12 months ago, a small increase from 17 percent last month. Sixty-four percent say household income has stayed the same. Fannie Mae's survey is a representative sample that polled 1,001 respondents. KNOW THIS Private-label securities hold just 8% of all first mortgages outstanding but a disproportionately large share of serious delinquencies at 26%, according to data provided in Freddie Mac's Q3 earnings report. 39

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