Today, MBA is releasing a plan detailing how a future secondary mortgage market can work – describing a post-conservator end state for Fannie Mae and Freddie Mac. Our proposal includes transition steps detailing how to get from here to there and is the only paper that comprehensively addresses how the reformed secondary market would serve all Americans along the broad continuum of affordable housing needs.
Responding to the crisis in housing will require aggressive action. Here are three ideas from MBA President and CEO David Stevens to America's next president. When it comes to meeting the housing needs of its people, America has always responded forcefully. Will the next president do the same?
The calls to allow the GSEs to rebuild capital amplify an important issue and are based on valid and reasoned concerns that we all share. Unfortunately allowing them to just recapitalize is simply not a mathematical possibility.
Right now, Fannie Mae and Freddie Mac are providing liquidity in the secondary market for residential mortgage in the absence of private capital. The unbalanced dependence here puts the entire system on untenable ground and presents enormous risks to taxpayers.
"A homecoming for these heroes is something to be celebrated. Sadly, as we continue to recover from the largest economic downturn in generations, many of our veterans face homelessness, health care complications and high unemployment rates," Mortgage Bankers Association President and CEO David Stevens said.
When the housing crisis began, the federal government took measures to stabilize the real estate finance markets, ensure ongoing liquidity and prevent further losses. Congress passed the Dodd-Frank Act that put many of these measures in place, including the establishment of the Consumer Financial Protection Bureau and statutory requirements for federal regulators to create and enforce new regulations to protect consumers and ensure a crisis of this proportion was never allowed to occur again
Build to rent allows investors to buy newly built homes and rent them out instead of selling them. Because the homes are new, investors are able to charge higher rent prices and tenants often stay in the home for longer periods of time. But the question remains: Why would builders move into the rental market during a time when homes are selling quickly and at higher prices than any time in the past decade?
Today the average student debt resulting from a four-year degree stands at $30,000. According to a report released by American Student Assistance in 2015, 71% of non-homeowners surveyed who carry student debt say the burden of monthly payments has kept them from purchasing a home. More than half of those say their student debt loads will likely prevent home ownership for another five years.
Currently, institutional investors control approximately 170,000 properties (a relatively small portion of the overall SFR space, which is dominated by smaller investors, and estimated to include 11 to 13 million properties). KBRA reports that 105,000 properties have been included in the 26 single-borrower deals done to date, which suggests there are somewhere north of 60,000 properties that could still be securitized.