Here’s what the Federal Housing Finance Agency plans to do from 2013 to 2017.
The message is approved by the Treasury. The FHFA released its proposed plans back in May. This is the final version.
The FHFA admits government-led housing is not a great idea. Solving these problems depends largely on politicians making the right decisions, the paper states.
“The initiatives and strategies set forward in this plan will serve to improve current mortgage processes, inspire greater confidence among prospective market participants, and set the stage for recovery and an improved future system of housing finance,” said FHFA acting director Edward DeMarco.
DeMarco adds that it is his hope that the plan will conserve the assets of the government-sponsored enterprise while, at the same time, support the creation of a private mortgage lending environment. No private sector infrastructure exists today capable of securitizing the $100 billion per month in new mortgages being originated, the paper states.
Guidance set forth in the white paper is somewhat weak, offering a vague indication of what the FHFA intends to do. Specifics, like most of these federal indicators, are in short supply.
Particularly interesting, however, is Performance Goal 2.3. This goal reiterates FHFA dedication of expanding homeowner opportunities.
“FHFA is also committed to reducing barriers restricting borrower access to the mortgage markets,” the white paper states.
Translation: Bring back subprime.
The agency also said it anticipates a larger use of short sales, deed-in-lieu and deed-for-lease options.
Furthermore, the FHFA intends to get some sort of win in its lawsuits against major banks. It will also periodically review changing g-fees, which it recently raised, as well as experiment with risk-sharing with private institutions.
The wording in the repurchase section also indicates the FHFA may increase putbacks.
“Representations and warranties are a loan originator’s assurance to an Enterprise that a mortgage sold to the Enterprise has been underwritten as specified by contract,” the paper states. “If that is found not to be the case, the originator must buy back the loan at par.”
jgaffney@housingwire.com
