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» VISIT US ONLINE @ DSNEWS.COM Compiled by the DS News Staff FIVE MINUTES WITH Sanjeev Dahiwadkar PAGE 25 CEO AND FOUNDER OF INDISOFT INSIDE THE JOURNAL // MOVERS & SHAKERS // ON THE WEB // THE APP SPECTRUM SENATORS INTRODUCE BILL TO REPLACE GSES IN 5 YEARS Citing the overwhelming presence of Fannie Mae and Freddie Mac in today's mortgage marketplace, a bipartisan group of senators led by Sens. Bob Corker (R-Tennessee) and Mark Warner (D-Virginia) unveiled a new piece of legislation to replace the GSEs with a newly created agency and rebuild the private mortgage sector. The legislation would dissolve Fannie Mae and Freddie Mac within five years of passage and transfer their utility duties to a "different, modernized, and streamlined agency" called the Federal Mortgage Insurance Corporation. The GSEs' assets would be sold off to maximize taxpayers' return. The new access fund would be paid for with a small assessment on loans that go through the government platform. In addition, the new bill requires private market participants to hold 10 percent of the first loss of any mortgage-backed security (MBS) that purchases a government reinsurance wrap. It also sets up an infrastructure for splitting credit investors—who are willing to take on the risk of loss—from rate investors. Another proposed transitional step is to eliminate the enterprises' affordable housing goals, replacing them with "more transparent and accountable" counseling and rental assistance programs. The bill also puts in place strict criminal penalties against misuse of the government program. Finally, the bill would establish a new corporation—mutually owned by small banks and credit unions—created to protect community institutions by ensuring direct access to the secondary market for institutions of all sizes. "Some might say this goes too far, others not far enough. But regardless of where your political sensibilities are, you cannot think the current system works," the senators wrote in an op-ed published by Politico. "As memory of the crisis fades, the GSEs will again entrench themselves deeper and deeper into our system of housing finance. Soon, the path of least resistance will be to simply reconstitute Fannie and Freddie as they were. That would be totally irresponsible." Initial reactions to the proposed legislation were positive, but analysts at Barclays don't expect it to pass in its current form. The legislation transfers the GSEs' duties to a "different, modernized, and streamlined agency." A look at facts you didn't know you couldn't live without The December-to-April seasonal decline in delinquencies of 13.4% was the largest since 2004, Lender Processing Services reports. top10 Take a look inside the numbers data b i t s TOP REBOUND MARKETS U.S. Metro Rebound* San Antonio-New Braunfels, TX 233.11% Houston-Sugar Land-Baytown, TX 223.49% Austin-Round Rock-San Marcos, TX 219.74% Dallas-Fort Worth-Arlington, TX 203.26% Oklahoma City, OK 199.40% McAllen-Edinburg-Mission, TX 184.12% Tulsa, OK 179.03% El Paso, TX 133.01% Omaha-Council Bluffs, NE-IA 113.20% Little Rock-North Little Rock-Conway, AR 110.58% BOTTOM REBOUND MARKETS U.S. Metro Rebound* New York-Northern New Jersey-Long Island, NY-NJ-PA 11.80% Bridgeport-Stamford-Norwalk, CT 11.27% Stockton, CA 10.76% Palm Bay-Melbourne-Titusville, FL 10.67% Modesto, CA 10.62% Orlando-Kissimmee-Sanford, FL 10.05% Las Vegas-Paradise, NV 9.91% Lakeland-Winter Haven, FL 9.87% New Haven-Milford, CT 7.66% Providence-New Bedford-Fall River, RI-MA 6.08% Source: Homes.com Local Market Indices, data through April 2013. *Rebound is a measurement of the percent retracement of the peak-to-trough decline attributable to the Great Recession. As of Q4 2012, the OCC says servicing portfolios were comprised of 29 million home loans, 72% of which were prime mortgages. 9

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