Reforming Fannie and Freddie: The U.S. Senate has been working on legislation to reform Fannie and Freddie for the better part of a year. Recently, the Senate Banking Committee presented a reform bill and sought bipartisan support from members of the committee to pass the bill. Committee leadership knew that simply passing the bill would not be good enough. To overcome the 60 vote cloture requirement in the Senate, the committee would need 15-17 “yes” votes on the reform package. After months of negotiations to garner additional support, the Senate Banking Committee appears to be stuck at 13 votes. While the bill may be moved out of committee, there is little chance it will even be considered on the Senate floor this year because the votes are not there for passage. The proposed legislation would have unwound Fannie and Freddie and injected more private market capital in the housing financing system.
FHFA Assumes Leadership Role on Housing Policy: With the failure of housing finance reform legislation this year, the Federal Housing Finance Agency (FHFA) is poised to assume a greater role on housing policy matters. FHFA will not only be relevant in terms of the housing finance system, but as it oversees Fannie and Freddie, it oversees transactions and policies important to residential investors such as short sales, REOs and valuation methodology. FHFA recently announced a reform plan for the 12 Federal Home Loan Banks, and is expected to announce additional goals and policies later this year.
CFPB Introduces New eClosings Program: This new pilot program from the Consumer Financial Protection Bureau (CFPB) allows consumers to review and file mortgage closing documents electronically. The program includes guidance on how lenders can participate in the program. The CFPB gathers consumer complaints and anticipates potential consumer abuses regarding mortgage closings. The CFPB believes closing documents are too complex and more time is needed for consumers to review them. Essentially, the CFPB feels the stacks of paper presented to consumers at the closing are overwhelming, and this program will allow consumers more time to review the documents. The CFPB wants to reduce costs and risks associated with closings. Additionally, the CFPB wants to increase consumer understanding of the closing process and eliminate surprises at the closing table. There is no evidence to suggest consumers are more likely to read documents any more thoroughly or carefully online than at the closing table. The CFPB also recognizes the potential for a data security breach. The Federal Housing Finance Agency (FHFA), which has oversight of Fannie and Freddie, applauded the new pilot program. Consumer groups weighed in and are concerned about consumers who do not have Internet access.
CFPB Report – Elderly Accumulating Mortgage Debt: According to a report released by the Consumer Financial Protection Bureau (CFPB), seniors are accumulating a significant amount of mortgage debt. The study, comparing 2001 numbers to 2011 numbers, found that the percentage of homeowners over 65 years of age with mortgage debt increased from 22% in 2001 to 30% in 2011. The outstanding balance of debt has also spiked, from $49,000 in 2001 to $79,000 in 2011. The most drastic increase seen involves delinquencies. 90-day past due figures for homeowners over 65 has increased from 0.85% in 2001 to nearly 5% in 2011.
March Housing Data Report:
March 2014 Existing Home Sales Summary
National Median Homes Total Sales:
March 2014 – 4.59 million
February 2014 – 4.60 million
Price: $198,500
Single Family Homes Total Sales:
March 2014 – 4.04 million
February 2014 – 4.04 million
Price: $198,200
Condos Total Sales:
March 2014 – 550,000
February 2014 – 560,000
Price: $200,800
Notes:
- First-time buyers comprised 30% of March 2014 sales, up from 28% in February 2014 and the same as March 2013.
- All cash buyers comprised 33% of March 2014 sales, down from 35% in February 2014 and up from 30% in March 2013.
- Foreclosures comprised 10% of March 2014 sales. Short sales comprised 4% of March 2014 sales.
