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» VISIT US ONLINE @ DSNEWS.COM POINT—COUNTERPOINT P each of these concerns, and many more, are important, only a few, if any, will make it to the forefront of our nation's agenda. So what housing-related issues should take center stage for the man elected to lead the nation come 2013? DS News asked two industry veterans to share their opinions on what issues should be addressed first and foremost. olitical leaders are faced with the difficult task of deciding what issues to focus on at the risk of underrepresenting and overlooking other problems equally as pressing. In the housing sector alone, there are a plethora of challenges that demand attention—negative equity, a backlog of foreclosures, and a long list of new regulatory requirements, to name a few. While According to Stephen Faulkner The economic and jobs recovery that Americans desperately need will be materially affected by certain housing policy issues—issues shrouded in indecision and threatened by sheer market developments. There are many challenges facing the critical housing sector, but there are four specific issues that remain unaddressed where resolution is likely to have the greatest impact on restoring the housing market: the role of the Consumer Financial Protection Bureau (CFPB), GSE reform, Qualified Residential Mortgage (QRM) rules, and retaining the mortgage interest deduction. If the current administration remains in office, the financial services industry can expect to be increasingly impacted by a reinvigorated, strengthened CFPB. Expect the bureau to begin focusing soon on the credit reporting market and debt-collection industry. It can be argued that manipulation by the CFPB will further increase the cost and complexity of lending and servicing, thus slowing housing's recovery. The opposing plan of action recommends repealing or dramatically revising the Dodd-Frank Act which would effectively reduce the CFPB's influence and power and likely result in a quicker recovery. The handling of Fannie Mae and Freddie established to ensure lenders have some skin in the game. As of today, the final rules around QRM characteristics lack a very clear distinction of what will trigger the risk retention parameter. If clear and reasonable guidelines aren't established, lenders may very well refuse to make loans that could be subject to these rules, and credit will be restricted. Today the final guidelines rest in the hands of the CFPB. As discussed earlier, the fate of the CFBP may very well be decided by who wins the presidential election. Clearly, there will be changes to the tax code and tax rates in the next four years. In the past, expected home price appreciation and the tax benefits of owning a home were major considerations for people pursuing homeownership. We can probably all agree the days of rapid or even moderate value appreciation are gone. With that consideration null and void, the elimination of the mortgage interest deduction will almost certainly hurt the housing industry. The only question is how much? Addressing these four critical uncertainties in standards that will help prevent unnecessary foreclosures. Consumer advocates have been calling for foreclosure moratoriums, for systemic loan modifications, and for banks to make major investments to handle the millions of homeowners seeking mortgage assistance since the early stages of the foreclosure crisis. Four years later, we haven't made the progress that we need. Banks' loss mitigation departments are still understaffed and many are operating with outdated technology. We're still hearing the same consumer complaints as in 2008 about lost paperwork, unresponsiveness, and errors in calculating critical borrower criteria, but our biggest concern now is that servicers continue to dual track homeowners—proceeding to foreclosure while homeowners are in the loan modification process. We commend the CFPB for calling for uniform servicing standards, but we are extremely concerned about the provisions in the proposed regulations that address the practice of dual tracking, which has resulted in far too many Americans, particularly Latinos, unnecessarily losing their homes to foreclosure. The CFPB's proposal gives mortgage servicers Mac, more specifically their reform and liquidity efforts, is a monumental issue facing housing policy considering approximately 75 percent of mortgage securitization is performed by these entities. The two enterprises are working together to devise a single, uniform securitization platform by December 31, 2012. Depending on its success, the GSEs intend to offer this securitization platform to private-sector mortgage servicers. The only real uncertainty regarding the future of the "mortgage giants" is to what extent they will remain under government conservatorship. The key is for these entities to operate more efficiently thus increasing execution effectiveness. This will increase the industry's ability to operate in a more profitable manner, which will translate to greater lending opportunities. The rules defining a QRM will determine which loans are exempt from and which loans are subject to the 5 percent risk retention requirement the market—the CFPB, the GSEs' future, QRM guidelines, and the mortgage interest deduction tax break—is paramount to restoring America's housing markets, and their revival, as well as legislation tailored to support their revival, are economic drivers that can help restore the health of our economy as a whole. According to Jose Garcia It's no question that since 2008, homeowners across the country have suffered tremendously. Over the past four years, banks have foreclosed on almost 3.8 million homes and a disproportionate number of those homes belonged to Latino families. Unfortunately, the disproportionate impact of the housing crisis persists today. Latinos, and all homeowners, are in desperate a 90-day window in advance of a foreclosure sale to evaluate a borrower's loan modification application before borrower protections under the new loss mitigation rules kick in to halt foreclosure while a mod is being considered. A deadline this far out is flat out unreasonable, especially when you consider that in many non-judicial foreclosure states, foreclosures can be completed in as little as 110 days. That could potentially leave borrowers in the dark about the status of their loan modification application until 20 days before the foreclosure sale, at which point they have almost no option but to give up their home. It is imperative that the next administration work need of a resolution to this housing crisis and, quite frankly, cannot endure another four years without changes to our current housing policies. Whoever takes the reins after Election Day must commit to properly enforcing mortgage regulations and to addressing shortfalls in mortgage servicing with the CFPB to eliminate dual tracking and add certain provisions to the proposed rules on mortgage servicing that prohibit such a practice. Banks should not be allowed to initiate foreclosure proceedings while homeowners are still being evaluated for loan modifications. And any foreclosures that are already proceeding should be halted until all evaluations including appeals are completed. Unnecessary foreclosures have had profoundly damaging costs on households, neighborhoods, and our economy as a whole. Homeowners have suffered enough during the past four years. We need our country's leadership to do everything they can to ensure families who can afford their homes can keep their homes. 71

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