Adam Constantine on MLK Jr.’s impact on housing equality

During the interview, Constantine explains why the industry needs to focus on evoking intentional change rather than launching lackluster initiatives.

Navigating capacity concerns amidst record-high volumes

High loan volumes continues to loom large in the new year, making the “one-stop-shop” approach to the servicing and lending process even more appealing.

How servicers continue to protect neighborhoods amid COVID

We spoke with MCS CEO Caroline Reaves about self-service technology, the shift to virtual and how servicers can prepare for post-COVID success by improving processes today.

How student loan debt impact homeownership

Student loan expert Catalina Kaiyoorawongs shares her practical and tangible advice for people who feel overwhelmed by their student loan debt.

Real Estate

The looming danger facing the affordable housing industry

Affordable housing experts weigh in on state of housing market

The economic hardships wrought by the coronavirus pandemic will be long-term, and millions of renters and homeowners alike could take a serious hit in the upcoming months, affordable housing experts said on a recent webinar hosted by Freddie Mac.

Despite economists’ more optimistic housing predictions for the year ahead, one panelist felt that the worst may still be yet to come.

“We’re going to be starting off 2021 in a very difficult place when it comes to a potential wave of evictions as well as a current growing forbearance pipeline and delinquencies,” said Alanna McCargo, Vice President of Housing Finance at the Urban Institute. “Both of those dynamics are going to be sort of the things that are front and center.”

McCargo explained that in order to prevent a foreclosure crisis, housing professionals need to focus on one priority: keeping Americans in their homes.

“That means we need to be thinking about, on the homeownership side, loss mitigation programs that work for long term,” McCargo said. “This isn’t a short term crisis like natural disasters. This is a long term recession and it’s going to have implications for quite some time.”

How the mortgage industry is working together to make housing more affordable

The issue of housing affordability has no one solution, but with collaboration across the entire housing industry, together we can create more opportunity for more people to achieve sustainable, long-term homeownership.

Presented by: Fannie Mae

She said that housing leaders will need to dig deep to find solutions, such as keeping people in forbearance longer or working out longer-term solutions for borrowers exiting forbearance. Reducing payments as homeowners get back on their feet could be vital, she said.

“All of those things are going to be really critical in the loss mitigation realm, so keeping people housed will be sort of be priority one and of the most difficult challenges that we’ll all face,” McCargo said.

The latest data from the Mortgage Bankers Association shows Fannie Mae and Freddie Mac loans in forbearance decreased to 3.26% as of Dec. 6 – an 8-point improvement. Ginnie Mae loans in forbearance decreased 21 points to 7.68%. But despite these improvements, more borrowers are again starting to seek relief with new forbearance requests reaching their highest level since the beginning of August. Roughly 1.8 million homeowners were also seriously delinquent on mortgage payments in October, according to data from Black Knight.

One way to ensure borrowers are maximizing their options is to offer refinances as a form of mitigation.

“I think we should be thinking about refinancing as part of the loss mitigation toolkit,” McCargo said. “People are maybe not losing their jobs entirely but they’re losing some of their income. And these refinances would help, in some cases, families reduce their monthly payment in half. That’s huge.”

With interest rates hitting yet another historic low this week of 2.67% for a 30-year fixed-rate, according to the latest survey from Freddie Mac, refinancing a mortgage could allow borrowers to lower their monthly payment significantly.

Freddie Mac Chief Economist Sam Khater speculated on the panel that by refinancing, homeowners could potentially save hundreds of dollars on their monthly mortgage payments, calling it an instant “magical raise” to borrowers’ incomes. Nearly 20 million Americans could benefit from a refinancing, by some estimates.

But the affordable housing panelists also argued that much of helping Americans stay in their homes must be done at the regulatory level.

“Innovation is great, but we’ve really got to fix one of the major barriers to affordability and affordable housing, which is around local zoning and local land use restrictions, and those issues are very dynamic and they’re complex and they’re very different,” McCargo said.

Panelist Christopher Herbert, Harvard Joint Center for Housing Studies managing director, agreed.

“As much as I think there’s some really good promising models out there, I think there’s more attention needed on the regulatory side to make sure that these are the best interests of consumers as well,” Herbert said.

And while these affordable housing experts are bracing for a difficult year ahead, they remain optimistic.

“I am optimistic about the narrative and the story and the awareness of the need for more supply,” Khater said. “Because, in my opinion, I that not only is it the biggest obstacle for the housing market, but it’s the biggest obstacle that the economy faces because when we have demand going up and supply is fixed, prices obviously go up and it causes dislocation. It causes lower- literally causes lower economic growth.”

Leave a comment

Most Popular Articles

CFPB Director Kathy Kraninger resigns at Biden’s request

Consumer Financial Protection Bureau Director Kathy Kraninger announced Wednesday she is resigning from her post at the request of President Joe Biden’s administration.

Jan 20, 2021 By

Latest Articles

HousingWire Lead Analyst featured on Bloomberg Radio

Logan Mohtashami doesn’t think rising home prices will lead to a market crash. Listen to his interview on Bloomberg Radio hosted by Paul Sweeney and Vonnie Quinn.

Jan 23, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please