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  #1  
Old 10-30-2009, 04:58 PM
Mike Kennedy's Avatar
Mike Kennedy Mike Kennedy is offline
 
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Location: Southern Hudson Valley
State: New York
Professional Status: Certified Residential Appraiser
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Exclamation FHFA Sends Two New Reports to Congress

WASHINGTON, DC – Acting FHFA Director Edward J. DeMarco today sent two reports to Congress pursuant to requirements of the Housing and Economic Recovery Act, passed in July 2008. The reports discuss a number of topics, including mortgage risk, Fannie Mae’s and Freddie Mac’s housing goal performance, and key developments in the housing market.

FHFA analyzed the loan-level data submitted with the Enterprises’ AHARs for 2008 to
determine their performance on the 2008 housing goals and subgoals.
The results are as follows:

Fannie Mae / Freddie Mac
Low- and Moderate Income Goal: 53.7 percent 51.5 percent
Underserved Areas Goal: 39.4 percent 37.7 percent
Special Affordable Goal: 26.4 percent 23.1 percent
LM Home Purchase Subgoal: 38.8 percent 39.3 percent
UA Home Purchase Subgoal: 30.4 percent 30.2 percent
SA Home Purchase Subgoal: 13.6 percent 15.1 percent
SA Multifamily Subgoals: $13.31 billion $7.49 billion

Fannie Mae exceeded the underserved area goal by 0.4 percent but failed to meet the low- and
moderate-income and special affordable housing goals. Freddie Mac failed to meet all three
overall housing goals. Both Enterprises’ performance fell short of the three home purchase
subgoals, but their performance exceeded their special affordable multifamily subgoals. FHFA
notified the Enterprises of their official goal performance in letters dated June 11, 2009.8


C. 2009 Housing Goals
The Safety and Soundness Act, as amended, includes a transitional provision for the 2009 affordable housing goals. Specifically, section 1331(c) provides that the 2008 housing goals shall remain in effect for 2009 and directs FHFA to review the goal levels for 2009 to determine
their feasibility given current market conditions, and after seeking public comment, make appropriate adjustments consistent with the market conditions.

After evaluating market conditions and seeking public comment, and in light of continued deterioration in market conditions and an unexpectedly high volume of refinance mortgages obtained by higher-income borrowers, FHFA determined that all of the goal and home purchase subgoal levels and the housing goal and subgoal levels should be reduced for 2009.

On May 1, 2009, FHFA published a proposed rule revising the overall 2009 housing goals and the 2009 home purchase subgoals.
10 Following review of the comments on the proposed rule and an updated analysis of mortgage market conditions, on August 10, 2009, FHFA published a final
rule establishing the 2009 housing goal levels as follows:

Lowered the existing low- and moderate-income goal from 56 percent to 43 percent

Lowered the existing underserved areas goal from 39 percent to 32 percent

Lowered the existing special affordable goal from 27 percent to 18 percent

Lowered the existing low- and moderate-income home purchase subgoal from 47 percent to 40 percent

Lowered the existing underserved areas home purchase subgoal from 34 percent to 30 percent

Lowered the existing special affordable home purchase subgoal from 18 percent to 14 percent

However, because of the severe curtailment of secondary market financing for multifamily properties from other sources, FHFA modestly increased the existing special affordable multifamily subgoals for the Enterprises—for Fannie Mae, from $5.49 billion to $6.56 billion, and for Freddie Mac, from $3.92 billion to $4.60 billion. The 2009 special affordable multifamily subgoals are well below the Enterprises’ actual performance on these subgoals in
recent years. However, due to conditions in the multifamily market, the subgoals will be challenging for the Enterprises to meet.


http://www.fhfa.gov/webfiles/15152/ReportsPR103009.pdf
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  #2  
Old 10-30-2009, 05:23 PM
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CANative CANative is offline
 
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Default

Quote:
However, because of the severe curtailment of secondary market financing for multifamily properties from other sources, FHFA modestly increased the existing special affordable multifamily subgoals for the Enterprises—for Fannie Mae, from $5.49 billion to $6.56 billion, and for Freddie Mac, from $3.92 billion to $4.60 billion. The 2009 special affordable multifamily subgoals are well below the Enterprises’ actual performance on these subgoals in
recent years. However, due to conditions in the multifamily market, the subgoals will be challenging for the Enterprises to meet.
Ha! No wonder it's so freaking hard to do a multi-family now days. I won't accept these types of assignments no matter how much money they offer. JVI want's to pay a whopping $400 for 4 unit properties. zzzzzzzzzzzzz
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  #3  
Old 10-30-2009, 07:26 PM
Tom Watson Tom Watson is offline
 
Join Date: Oct 2009
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Default FHFA sends 2 reports to Congress on Mtg Market

This thing is choice. 345 pages of b***hit complete with cowbells. A lot of it is about appraisals and the benefits of AVM's. Some of you math wizzes might want to check out this Austin Kelly report 42-69. Looks like some misinformation to me. The first 69 pages are about the FHFA's stance on appraisals and how great AVM's are. Unreal.

Some quotes:
Appraisal by an individual trained in local markets could be augmented, if not completely replaced, by a modern version of “computerized mass appraisal,” relying upon simple statistical measures (e.g., hedonic models of house values) and a large sample of house sales, and firms specializing in that phase of the process grew and thrived during the past decade.

A theoretical paper by Shiller and Weiss (1999) illustrated the application of statistical or “Automated Valuation” models (AVMs) to mortgage underwriting and to the limitation of mortgage portfolio losses due to default. The key insight of the Shiller-Weiss analysis was the explicit linkage between lender profitability and the loan-to-value (LTV) ratios of loans, permitting the probability distribution for an appraisal to be summarized by the profitability of the underlying loan. Those ideas were quickly incorporated into the practical world of mortgage underwriting (see, for example, Elizabeth Mays’ Handbook of Credit Security, 2001), and a variety of competing proprietary real estate valuation systems flourished.

Decreased appraisal quality (that is, over-appraisal of a property relative to a hedonicbased estimate) was significantly related to default, while under-appraisal had little effect. The authors also found that errors resulting from estimating collateral values by interpolation using a price index for the state (the Office of Federal Housing Enterprise Oversight [OFHEO] index6 for Alaska) were quite large. The authors provided some sensible prescriptions for lenders, suggesting that the latter may want to compare appraisal information with statistically-based measures in a routine way.

To some extent, the fact that a buyer is willing to pay $X for a house sets $X as the market value, rendering an appraisal somewhat superfluous.





Tip: Control F for search and input apprais to search the document


FHFA housing goals : http://www.fhfa.gov/webfiles/15150/1...g%20Report.pdf

Last edited by Tom Watson : 10-30-2009 at 07:34 PM.
  #4  
Old 10-30-2009, 07:44 PM
Tom Watson Tom Watson is offline
 
Join Date: Oct 2009
State: Oregon
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I hope this doesn't get buried, I would really like others opinions on this

EDIT: Mike!! You beat me to it lol
  #5  
Old 10-30-2009, 08:19 PM
LI-Appr LI-Appr is offline
 
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God Bless First Amer and Core Logic. Take both of them add a little water anf Presto. You got a Value!!
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