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32 HUD SECRETARY CASTRO EXPRESSES OPTIMISM, ADDRESSES CHALLENGES FACING HOUSING Hours after President Obama delivered his annual State of the Union address, HUD Secretary Julián Castro took a slightly smaller stage to discuss his department's efforts to boost homeownership in 2015. In a live-streamed "fireside chat" with Zillow Chief Economist Dr. Stan Humphries, the secretary reiterated that 2015 will be a "year of housing opportunity," reusing a phrase he coined in a National Press Club appearance earlier this month. Castro based his optimism on what he called a "confluence of factors" he believes will encourage more potential homebuyers to take the plunge this year, including a leveling off in home prices, lower entry barriers to mortgage credit, and falling costs—helped by an im- minent reduction in Federal Housing Admin- istration (FHA) annual mortgage insurance premiums and the Federal Housing Finance Agency's (FHFA) directive for Fannie and Freddie to accept mortgages with lower down payments. "All of those things add up to greater op- portunity to move from renting to buying in 2015," Castro said. When it comes to making the transition from renting to owning a home, he acknowl- edged there are challenges, particularly as rising rental costs make it difficult for consum- ers to save for a down payment. Stagnant wages have also presented a problem in that area, though Castro asserted they're "moving in the right direction." Another major challenge the secretary addressed was the issue of credit availability, which he said has kept a lot of mortgage appli- cants with "what historically would have been considered pretty good credit" from buying a home. rough November, the average FICO score for an approved loan application in 2014 was about 726, according to mortgage services provider Ellie Mae. In addition to the FHA premium cut and the push for lower down payment options, Cas- tro highlighted HUD's "Blueprint for Credit Access," an initiative to expand credit offerings to qualified borrowers through counseling programs and clarified lending rules. ough some critics have argued opening up mortgages to a larger pool of borrowers will degrade loan quality, Castro maintained that won't be the case. "Policies have fundamentally changed to create safeguards so that we can offer the op- portunity to own a home for people who are ready and responsible to buy," he said. Regarding the government's role in the mortgage market, the secretary was hesitant to offer an idea of what he believes is an appropri- ate amount of presence, though he did say he supports efforts to bring in more private capital. However, he added that he believes the government has a role to play, particularly in serving low- to moderate-income borrowers and in providing a backstop for the securities market, two functions he said are "vital pieces of housing finance going forward." "We have to remember how we were able in the United States to build up the homeowner- ship rate to where it is today," he said. "FHA certainly played a significant role in that, and for our part at HUD, we hope it continues to." FHA HAZARD CLAIM SERVICES PROVIDING TRADITIONAL AND PROVIDING SERVICER SOLUTIONS www.zvnproperties.com | 957 Cherry St. Canal Fulton, OH 44614 | (330)854.5890 | info@zvnproperties.com EXPERIENCE INITIAL FILE REVIEW CLAIMS MANAGEMENT REPAIR MANAGEMENT RECOVERABLE DEPRECIATION THE ZVN DIFFERENCE Our dedicated repair network guarantees quality work that ensures every available recoverable dollar is paid, always maximizing the value of every claim! HAZARD INSURANCE RECOVERY