In this series of interviews, we focus on the people who are shaping the state of housing at the top — the policy and regulation experts. The FHFA and the GSEs are essential to painting the picture of today’s housing market and industry trends. To help shed some light in this area, several of the 2022 HousingWire Vanguard honorees shared their insights on what’s happening at the federal level that’s going to affect housing this year and into 2023.

Faith Schwartz, CEO at Housing Finance Strategies

HousingWire: Which trends in housing regulation are you and your team most focused on as we move into 2023?

Faith Schwartz: The central tenet of our practice and my work throughout my professional career has been the consumer. We continue to put the consumer front and center as we view this economic cycle of increasing interest rates and inflation.

These headwinds impact consumer capacity to qualify for new mortgages and maintain homeownership. Against the grain of these challenges is a robust marketplace for jobs, so we see opportunities to modernize the mortgage application process through smart technology. This starts with origination innovation such as the use of “credentialed” bank statements to measure the ability to pay and includes enhancements to property valuation such as 3D scanning to deliver more precision and automation to the appraisal process.

Modernization and automation are critical focus areas for our team as we seek to create a mortgage market that leverages source data so all downstream participants can benefit from improved risk management and transparency.

HW: As a 2022 Vanguard honoree, what has been your proudest accomplishment?

FS: Success for all this year can be measured collectively through how we managed the COVID-19 pandemic. I am proud of the Help for Home alliance we brought to market and the broad participation of 60 mortgage servicers and over 120 nonprofits. This work helped to align parties and ensure no COVID-19 pandemic-impacted borrower was left behind.

As I think back to my days leading the HOPE NOW Alliance, I am very pleased with how the industry stepped up to the challenge and rallied for the benefit of the consumer. We have done good work here, and I am the first to acknowledge the success of the CARES Act forbearance and maintaining homeownership for those impacted by the COVID-19 pandemic.

HW: What major changes in federal regulation and legislative policies should people be paying more attention to?

FS: The Biden administration set forth an ambitious housing agenda, and FHFA Director Thompson, HUD Secretary Fudge and Ginnie Mae President McCargo have spoken quite clearly to the imbalance in our housing system. They have framed policy in a lens to move the needle on the homeownership gap.

As I talk to the industry and our clients at Housing Finance Strategies, I shine a bright light on paying close attention to how we as an industry can address this challenge. I see great opportunities through Special Purpose Credit Programs, and our senior advisor Jeff Jaffee has provided thought leadership on the challenges and business solutions that we can seek. We all should be paying greater attention to the homeownership gap.

HW: If you had the power to implement one piece of housing regulation today, what would you implement?

FS: That’s an interesting question because the needs across the board are so extensive. However, if I had to choose one regulation to implement through a magic wand, I would choose climate policy. The industry has great intelligence on climate, but the consumer does not. We should be rolling out policy now to create a more informed consumer, plus we should provide qualification incentives to begin this long process of remediation where necessary and prepare for the very real climate risks on the near-term horizon.

I worry climate risk may disproportionately impact those who can least afford it. As I have throughout my career, we have to look at climate risk through the eyes of the consumer and implement policies accordingly.

HW: Heading into 2023, what do you think the government will be focused on when it comes to housing?

FS: Having worked through many tough economic cycles throughout my career, I believe the government will focus on the challenges that this interest rate environment will present. Offsetting inflation will be a key focus area of the government, and I anticipate we will see a continued focus on the homeownership gap through innovation in products, services and credit scoring to name a few. I also expect to see more from the PAVE task force in 2023. This will include greater use of technology to eradicate bias from the process, but also I see the start of a movement toward an alternative workforce, one that can bring significant change and diversity to the workforce. At Housing Finance Strategies, we are so excited to continue our efforts to work with the government and our clients to shape the mortgage markets of tomorrow in 2023.

This interview was originally published in the October/November issue of HousingWire Magazine. To view the full issue, click here