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» VISIT US ONLINE @ DSNEWS.COM 21 David Lowman is Executive Vice President, Single-Family Business at Freddie Mac. As head of Single-Family, he has responsibility for managing the company's relationships with its Seller/Servicers, the performance of Freddie Mac's guarantee book of business, securitization of new business, and all sourcing, servicing and business operations. Lowman served as CEO of Chase Home Lending from 2006 to 2011, overseeing $150 billion in annual production and a $1.2 trillion servicing portfolio. Prior to that, he spent a decade in senior leadership roles in various lending businesses of Citigroup, including time spent as head of CitiMortgage. What are the priorities for Freddie Mac's Single-Family Business this year? First, we are continuing our effort to be a market leader and provide the best service to our customers. A big part of this effort is our commitment to invest in the tools that we and our customers use to help ensure that loans are manufactured to our requirements. What is also critical to our business' continued success is meeting our affordable housing goals and figuring out better ways to responsibly increase access to credit for aspiring new homeowners. What is your perspective on the health of the housing market right now? Are we out of the woods yet or are their still risks out there that could drive housing off of the rails? I think we are getting closer to normal every day. Our serious delinquencies are steadily improving–in fact, they're at the lowest level since January 2009—and our foreclosure inventory has continued to decline significantly. Major changes introduced after the crisis, like the appraisal independence requirements and the Uniform Mortgage Data Program, are now part of the normal business routine for most of our customers. e return to normalcy reflects a lot of hard work by our industry and Freddie's customers, as well as rising home prices and employment levels. I'm optimistic that steady GDP growth and positive employment news will continue to stabilize and normalize the housing environment. On the other hand, the fact that homeownership rates are at their lowest level in 25 years might make it hard for anyone to say we are completely out of the woods. What is top of mind in the servicing customers you talk with today? How is Freddie Mac responding?e high volume of delinquent loans during the downturn really tested the servicing industry's capacity across servicing platforms. Today's landscape includes evolving regulations and compliance costs that require many servicers to invest in new technologies and in-house compliance programs. e impact of these changes on business operations and future business plans are clearly top of mind in the conversations I've had with our servicing customers. Many of the forces re-shaping the servicing industry, like international regulations, are beyond our scope. But what we can do, we are doing and we plan to do more. We've already shortened the life of certain selling representations and warranties for performing loans and have begun to roll out affordable quality management tools, like Loan Quality Advisor. We are also working with our regulator and the industry on a number of fronts to create more sound servicing capacity and certain streamlined products to provide relief to servicers and borrowers. What has been the early response to Home Possible Advantage, your 97% LTV product? Now that 3 percent down- payments are back, are you looking at reintroducing other products that vanished after 2008, such as low-doc loans? Generally, we are seeing a great response from our Sellers. Home Possible Advantage expands lending opportunities and provides another option for working families with good credit, although they may not have large savings. Home Possible Advantage also enables first time homebuyers to take better advantage of affordable mortgage programs offered though their state housing finance agencies, down-payment assistance offered by local governments, and gifts from family members or employers. Home Possible Advantage is doing what it was intended to do: help maintain affordability in home lending. Are we evaluating our products to further this mission? Absolutely. But we're also very focused on responsible lending and what's best for the consumer. You spent your career at Chase Home Lending, CitiMortgage and other Freddie Mac customers. What's it like being on the other side of the table? First off, I am having a lot of fun. I was a customer of both Freddie Mac and Fannie Mae for over 25 years. I had the good fortune of working at the great companies you mentioned and also two entrepreneurial independent mortgage companies -- e Prudential Home Mortgage and Guaranty Mortgage. My experiences with these companies are really helping me bring an outward focus to work at Freddie Mac that is important to our customers and important to trying to make the housing finance market function better. I am also blessed with a great team of dedicated, smart, energetic, innovative professionals that share my passion for being the market's best credit guarantor. You're a 30 year veteran of the housing finance industry, serving in both the large bank and government sponsored enterprise settings. In your view, how has the industry changed over the years? I've seen a lot of change in a complicated business that shows no signs of becoming simpler. I have seen the industry consolidate to banks and now, post crisis, deconsolidate into more independent mortgage banks. So the players have changed. In addition, the complexity of the business has also gone full cycle. We manually underwrote everything with lots of paper 30 years ago. en, we relied on less documentation and relied on automated underwriting engines. Now we are using automated underwriting engines and we collect more documentation than ever before. e loan manufacturing process has become more arduous post crisis. Today's culture of zero tolerance for mistakes is causing lenders to add people, which in turn increases the costs to make a loan. Our challenge, as a company and an industry, is to keep up with the pace of change by providing the technology to automate the new requirements and controls.

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