The latest economic and policy trends facing mortgage servicers

Join this webinar for an in-depth roundtable discussion on economic and policy trends impacting servicers as well as a look ahead at strategies servicers should employ in the next year.

2021 RealTrends Brokerage Compensation Report

For the study, RealTrends surveyed all the firms on the 2021 RealTrends 500 and Nation’s Best rankings, asking for annual compensation data for the 2020 calendar year.

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Lenders, it’s time to consider offering non-QM products

The non-QM market is making a comeback following a pause in 2020. As lenders rush to implement, Angel Oak is helping them adopt these new lending products.

MortgagePolitics & Money

Mark Calabria: Trump administration “committed” to ending conservatorship

Pence’s chief economist renews commitment for GSE reform

During a wide-ranging discussion about the government’s role in housing, Vice President Mike Pence’s chief economist Mark Calabria revealed Wednesday that the Trump administration is "committed" to ending the conservatorship of Fannie Mae and Freddie Mac.

Calabria, a long-time housing reform advocate, joined the Trump administration earlier this year. Prior to joining the Trump administration, Calabria served as the director of financial regulation studies at the Cato Institute, a think tank that is “dedicated to the principles of individual liberty, limited government, free markets and peace.”

Speaking at the CoreLogic and the Urban Institute’s Housing Finance, Affordability and Supply in the Digital Age conference held Wednesday in Washington, D.C., Calabria touched on many items of note, including the government's use of the False Claims Act to go after Federal Housing Administration lenders, and the lengthy conservatorship of the government-sponsored enterprises.

One of the main issues, Calabria said, is the looming prospect of Fannie and Freddie having no capital. Under the terms of the government's conservatorship agreements with the GSEs, both Fannie and Freddie are scheduled to have a zero capital buffer on Jan. 1, 2018.

With that lack of capital at the GSEs, taxpayers are more exposed to the mortgage market today than ever before, Calabria said.

To that end, Calabria said the Trump administration is committed to not handing Fannie Mae and Freddie Mac in conservatorship over to the next administration, but cautioned that the process will not be easy. "If it were easy to get GSEs out of conservatorship, it would have been done already," Calabria said.

Calabria's session was titled "What is the Appropriate Role of Government in Housing?," so the session focused on issues beyond the GSEs.

In the session, Calabria explained there are only three factors that are important for economic growth, and therefore the housing market.

Calabria listed population growth, productivity and labor development as the three factors to economic growth. “Nothing else matters,” he said as murmurs of disagreement drifted through the session’s listeners.

Questions such as, “Infrastructure? Education?” hung in the air.

When looking at the housing market specifically, he gave two factors that stand above the rest.

Calabria explained that with strong economic growth, a strong housing market will naturally follow. Even disaster areas, he mentioned, tend to see a much easier and quicker recovery in strong economic growth cities.

He emphasized that the government’s greatest current first focus is disaster areas in Puerto Rico and other hurricane-effected regions.

“The most important and pressing need is not how to get someone a certain mortgage, but those who lack homes altogether,” Calabria said.

He also touched on other issues in the mortgage industry, saying the administration is currently focused on addressing these areas:

Flood Insurance: Any true recovery will include a reform of the flood insurance program, Calabria said. After the current programs end in December, the government will look to pass reform for the program.

False Claims Act: As Ben Carson previously announced during a hearing before Congress and reiterated during the Mortgage Bankers Association Annual Conference in Denver recently, the administration is currently looking at and reevaluating the False Claims Act and its role in the housing industry.

Housing Supply: Due to the tight home supply, Calabria said that without a substantial uptick in homes on the market, a shift in demand could cause home prices to drop suddenly.

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Existing home sales pop the 2021 housing bubble boys

So far this year, every existing home sales print has been higher in 2021 than the closing level of sales in 2020, which was 5,640,000. Even with the unhealthy home price gains that we have seen in the last two years, more Americans have bought homes with mortgages in 2020 and 2021 than any single year from 2008-2019, and this looks perfectly normal with our current demographics. HW+ Premium Content

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3d rendering of a row of luxury townhouses along a street

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