DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1523845
41 July 2024 July 2024 » C O V E R S T O R Y Similarly, we could see the adminis- tration use a combined carrot-and-stick approach while working with state and local governments to remove barriers erected by NIMBY (Not in My Back Yard) communities to restrict construction of affordable housing. Politically, it's almost a certainty that a Trump administration would put as much pressure as possible on Jerome Powell and the Federal Reserve to begin cutting the Fed Funds Rate, which in turn, would likely result in mortgage rates declining, improving affordability for homebuyers and enabling more current homeowners to finally sell their homes, adding to inven- tory, and probably slowing down the rate of home price appreciation. There is also a chance that a Trump administration would unwind the con- servatorship of Fannie Mae and Freddie Mac, which would allow private capital to re-enter the mortgage market, and could have significant implications for origi- nators, servicers, and participants in the secondary market. Q: What were some of the stronger policies enacted by the Biden administration that you felt impacted the housing space? Is it still too soon to measure the impact of these policies? Pete Carroll: While tangible results may take some time to be realized, the Biden administration's extensive focus on hous- ing affordability and equity have made an impact. Initiatives such as HUD's Inter- agency Task Force on Property Appraisal and Valuation Equity (PAVE) have shined a light on and modified industry behaviors with respect to implicit or explicit bias in home appraisals. The FHFA/GSE Equitable Housing Fi- nance Plans and initiatives by the FHA and Ginnie Mae have significantly increased the availability of mortgage credit for low- to moderate-income (LMI) homebuyers while creating new programs to assist with the re- habilitation of single-family starter homes. These efforts have also shined a light on the chronic issues of undersupply of all types of housing, sparking numerous state and local initiatives to help address this crisis. Rick Sharga: Unfortunately, hous- ing policies tend to take a while to be implemented, and a longer time to have a significant impact, so it is hard to say how successful any of President Biden's initia- tives have been or will be eventually. Much of the focus to-date has been on subsidies to economically disadvantaged households to make renting more afford- able, which is good for those tenants but not necessarily the type of program that will have a beneficial long-term impact. Interestingly, some of the more im- pactful policies enacted by this administra- tion were extensions of programs created by the Trump administration in the early days of the COVID-19 pandemic. President Biden extended both the foreclosure moratorium on residential properties with government-backed loans, and the CARES Act forbearance program, which helped more than eight million borrowers. His ad- ministration also oversaw the execution of the Homeowner Assistance Fund, which distributed $10 billion to the states to be deployed in a manner that would help as many financially distressed homeowners as possible avoid foreclosure. Along with strong loan quality and a strong jobs mar- ket, those programs have led to historically low levels of mortgage delinquencies and defaults, which is good for both the mort- gage industry and the housing market. But the bottom line is that—fairly or unfairly—the Biden administration will go down in history as the administration in place when housing affordability was at its lowest point in U.S. history, and that fiscal and monetary policies over the past few years have contributed to home sales declining by 33%, decimating the mortgage industry in the process. "First, I would expect [Trump] to begin to push hard to influence the Federal Reserve. In fact, I suspect that if it is a Republican Congress as well, then the independence of the Fed is going to be called into question, if not stripped away." —Larry Goldstone, President, Capital Markets and Lending, BSI Financial Services