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50 DOES HOMEBUYER EDUCATION LEAD TO HOUSING STABILITY? Efforts to educate new homebuyers are paying off, according to HUD. In July, HUD published early findings from a large- scale study into the benefits of counseling buyers, e First-Time Homebuyer Education and Counseling Demonstration, and found that distance and telephone counseling programs in mortgage literacy and preparedness, homebuyer outcomes, and loan performance are indeed helping borrowers make better choices to achieve housing and financial stability. Between September 2013 and January of this year, HUD studied more than 5,800 prospective first-time homebuyers across 28 metro areas, as well as three large national lenders, 63 HUD- approved housing counseling agencies, and two remote service providers. According to the study, 65 percent of early participants (2,377 people) who were offered remote homebuyer education and counseling initiated services, versus just 25 percent of those who were offered in-person education and counseling. HUD cited improved mortgage literacy, greater appreciation for communication with lenders, and improved underwriting qualifications among the positives. ere was, however, no evidence of improved budgeting practices, i.e., buyers comparing a budget with their actual spending. "e early findings of this study underscore the need to continue supporting housing education and counseling programs, and the particular importance of making remote education and telephone counseling easily accessible to prospective homebuyers" said Katherine O'Regan, HUD's assistant secretary for policy development and research. "Over the next four years, we expect to produce long- sought answers about the impact of homebuyer education and counseling on mortgage literacy and preparedness, homebuyer outcomes and loan performance." Education, HUD concluded, could be the main factor in moving prospects into actual buyers. In June, the Harvard Joint Center for Housing Studies issued its annual State of the Nation's Housing report showing a continued decade-long downward trend in homeownership rates, while also noting that the vast majority of Americans indicate a preference for homeownership and that homeownership remains a key component of wealth building potential. "Understanding the extent that education and counseling can facilitate homebuyer success at gaining and keeping a mortgage is critical to mapping the future homeownership strategy for America," HUD stated. POTESTIVO & ASSOCIATES WELCOMES NEW ATTORNEY Potestivo & Associates, P.C. has hired Brian C. Gurta. He is serving as Associate Attorney for the Landlord and Litigation Departments, located at the firm's Rochester office, according to an announcement from the firm. "We are pleased with Brian's advancement and commitment to excellence. He exemplifies the dedication and professionalism in serving our clients," stated Brian Potestivo, President and Managing Attorney. Gurta completed his B.S. at Grand Valley State University in 2011, majoring in Psychology and minoring in Business and Legal Studies. He then went on to earn his J.D. at Wayne State University Law School in 2015. Gurta's experience prior to this position includes being a Legal Intern at Quicken Loans, as well as a Litigation Law Clerk for Potestivo & Associates, P.C. Because of this experience, the firm feels Brian demonstrates that he is a good fit for the legal needs and objectives of Potestivo & Associates, P.C. In addition to his legal work, Gurta also belongs to the Detroit Veterans Bar Association and volunteers for the AmeriCorps Urban Safety Project. He has also earned his commission as an officer in the Michigan Army National Guard and United States Army. Potestivo & Associates is headquartered in Rochester, Michigan, and operates offices in Rochester Hills, Michigan; Grand Rapids, Michigan; and Chicago, Illinois. FANNIE MAE'S MORTGAGE PORTFOLIO VALUE TUMBLES Having fallen below its 2016 cap of $339.3 billion in March, Fannie Mae's gross mortgage portfolio contracted further in both April and May, shrinking at an annual rate of 32.0 percent in May, according to Fannie Mae's May 2016 Monthly Volume Summary. e 32 percent rate of contraction in May was more than double the rate of shrinkage in April (15.4 percent). With May's contraction, the aggregate unpaid principal balance (UPB) of Fannie Mae's gross mortgage portfolio was $317.65 billion at the end of the month—down by about $10.5 billion from April, according to Fannie Mae. e portfolio has declined at an annual rate of 18 percent over the first five months of 2016. According to the June 2016 Chartbook from Urban Institute, "(e GSEs) are shrinking their less liquid assets (mortgage loans and non-agency MBS) at close to the same pace that they are shrinking their entire portfolio." For Fannie Mae, the gross mortgage portfolio shrank year-over-year at the rate of 19 percent in April, compared to a 13.5 percent shrinkage rate in less liquid assets, Fannie Mae reported. Fannie Mae's total book of business, which includes the gross mortgage portfolio plus total Fannie Mae mortgage-backed securities and other guarantees minus Fannie Mae MBS in the portfolio, increased at a compound annualized rate of 0.1 percent in May up to a value of about $3.100 trillion, according to Fannie Mae. In January 2016, Fannie Mae's gross mortgage portfolio experienced a rare expansion, increasing at an annual rate of 5 percent. With May's contraction, the portfolio has now contracted in all but four months out of the last 70 months (since June 2010). e four months in which the portfolio expanded were January 2016, March 2015, January 2015, and December 2012. At the beginning of that stretch in June 2010, the amount of unpaid principal balance (UPB) of the loans in the portfolio was $818 billion. Fannie Mae's serious delinquency rate, or the share of loans backed by Fannie Mae that were seriously delinquent, declined by two basis points from April to May down to 1.38 percent. Fannie Mae completed 6,552 loan modifications in May, down from 7,097 in April.

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