On preservation and naturally occurring affordable housing. chanzuckerberg.com/newsroom/liste
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Laurie Goodman
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.: The economics of buying a manufactured home for a homebuyer has just improved drastically because of the price differential that exists today. The same holds true for homeowners in rural areas. dailyyonder.com/report-manufac | via
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Within the portfolio, both Fannie Mae and Freddie Mac contracted their less-liquid assets (mortgage loans, non-agency MBS), by 38.7 percent and 36.1 percent, respectively, over the same 12-month period.
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From April 2021 to April 2022, the Fannie portfolio contracted year-over-year by 30.9 percent, and the Freddie portfolio contracted by 42.6 percent.
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The Fannie Mae and Freddie Mac portfolios remain well below the $250 billion size they were required to reach by year-end 2018, or the $225 billion cap mandated in January 2021 by the new Preferred Stock Purchase Agreements (PSPAs).
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. on new proposed #CRA rules: You bring all these improvements together, and the potential is there to really turbocharge what has already been, I think, a signature achievement of CRA, which is community development. urbn.is/3wCzvXQ
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The most recent forbearance rate for Ginnie Mae loans was 1.25%; other (e.g., portfolio and PLS) loans had the highest forbearance rate at 1.86%.
See more here:
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The MBA has since moved to conducting a monthly survey with the most recent forbearance rate dropping to 0.85% as of May 31, 2022. GSE loans have consistently had the lowest forbearance rates, standing at 0.38% at the end of May.
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The share of loans in forbearance according to the MBA Weekly Forbearance and Call Volume Survey is shown here. After peaking at 8.55% in early June 2020, the total forbearance rate has declined to 2.06% as of October 31st, 2021, the final week of the call survey.
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Due to COVID-19, the share of loans that are 90+ delinquent or in foreclosure remained high but declined again by 50 basis points, from 2.83% in Q4 2021 to 2.39% in Q12022. This includes loans where borrowers have missed payments, including loans in COVID-19 forbearance.
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Loans in and near negative equity continued to decline in Q1 2022; 1.98% now have negative equity, an additional 0.30% have less than 5% equity.
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People view #homeownership as the single best way to build wealth, and they aspire to it. But aspiration is not necessarily the same as achievement. chanzuckerberg.com/newsroom/liste
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We believe forbearance could counteract a wide variety of income interruptions and expense shocks that lead to mortgage default, but it might be worthwhile starting with a narrow set of common and documentable life events to prove the program’s value before expanding eligibility.
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Just like with pandemic forbearances, the servicer would be responsible for advancing payments to investors and for the borrower’s escrow of hazard insurance and property taxes, to be reimbursed later.
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The arrearage of the missed payments becomes a part of the loss mitigation waterfall, now in use for COVID-19 pandemic forbearances.
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The limited set of circumstances includes job loss, death of a coborrower, the start of divorce proceedings (including filing in court or with state authorities for legal separation or an alternative), or a health issue that qualifies for leave under Family and Medical Leave Act.
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And the servicer would be obligated to extend forbearance for up to four months, without a negative report to the credit bureaus.
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We propose adding forbearance into the loss mitigation waterfall for a limited set of circumstances. The borrower would be able to contact their servicer and provide the necessary documentation at any time (instead of waiting until they are already late or missing payments).
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We must build more affordable homes. The crisis isn't just in big cities like DC or LA anymore. Policymakers must recognize the crisis we're in and act to make building more homes easier –– and then we need to help people get in those homes.
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Learn more in Housing Finance: At A Glance Monthly Chartbook, June 2022.
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Based on mortgages originated in April 2022, the average FTHB was more likely than an average repeat buyer to take out a smaller loan, have a lower credit score, and have a higher LTV, thus paying a higher interest rate.
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In April 2022, the first-time homebuyer (FTHB) share for FHA, which has always been more focused on first-time homebuyers, was 83.6 percent. The FTHB share of VA lending in April was 52.2 percent; the GSE share was a very similar 50.1 percent.
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Although it is not possible to project how many foreclosures could be avoided in each economic scenario, our back-of-the-envelope analysis suggests that societal benefits outweigh the costs, even if less than 5 percent of borrowers entering forbearance avoid foreclosure.
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Our proposal would also help borrowers avoid a hit to their credit history. We designed our proposal to be minimally disruptive to the mortgage industry and not require congressional action or major rulemakings.
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In fact, foreclosure is often the worst outcome for the holder of the mortgage risk, the borrower, and the community. In a #JustPublished report, we propose expanding mortgage payment forbearance eligibility to prevent thousands foreclosures each year. urbn.is/3BannAd
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When borrowers encounter life events that disrupt their ability to make their mortgage payments over several months, foreclosure is often the result. Temporary forbearance can give many borrowers a chance to get back on track.
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See more in Housing Finance: At A Glance Monthly Chartbook, June 2022.
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Before the pandemic, lower-priced homes appreciated more than higher-priced homes. With higher-priced homes experiencing steep appreciation since 2020, year-over-year price growth in the highest-tier now slightly exceeds the middle and lowest tiers.
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House price growth escalated dramatically in the second half of 2020 into 2021, and continues to remain elevated in 2022 across all price tiers.
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Year-over-year home price appreciation as measured by Zillow’s hedonic index was 20.91 % in April 2022, up from 20.61 % in March. With the sharp rise in both home prices and interest rates, affordability is constrained.
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According to Black Knight’s updated repeat sales index, year-over-year home price appreciation slightly decreased to 20.37 % in April 2022, compared to 20.42 % the previous month.
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I expect home price appreciation to slow dramatically, but I don’t expect home prices to decline. chanzuckerberg.com/newsroom/liste
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Before the pandemic, around half of the country's 44 million renters were cost-burdened (meaning they spent 30% or more of their monthly income on housing and utilities). Once the pandemic hit, and said this happened.
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These numbers represent a sharp worsening in affordability over the past year. As shown in the bottom picture, mortgage affordability varies widely by MSA.
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That's higher than the 30.9% at the peak of the housing bubble in November 2005; with 3.5% down it is 35.9%, slightly above the 35.8% prior peak in November 2005.
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