New Fhfa Head

[J Grant]

Whether it's a market correction or price collapse, the coming few years should be fun for the folks here who were screaming the last couple of years about how hot the market is and how high SC prices can be supported because a house has multiple offers and any appraiser who does not meet a SC price is "ignoring" the contract etc. With lots of free time on their hands and seeing housing prices fall, investors will start reviewing appraisals...what piece of junk loan did they just buy?

 

[Joe Flacco]

It's pretty stupid that somehow you interpret what has been posted in this thread to mean that people are going to lose 40-60% of equity.

 

[Randolph Kinney]

FNMA was created in 1938 to establish a secondary mortgage market for loans insured by the Federal Housing Administration. In 1968, Fannie Mae became a shareholder-owned company that could buy any mortgage, not just those insured by the government. It was even listed on the New York Stock Exchange.

The subprime mortgage crisis overwhelmed FNMA's ability to guarantee all those bad loans. After many bailouts and attempts to keep FNMA solvent, the federal government nationalized the company. Fannie Mae and Freddie Mac were brought down by the subprime mortgage crisis.

https://www.thebalance.com/what-is-fannie-mae-FNMA-3305986

What happens to an entity that started life as a buyer of federally guaranteed mortgages?

Why not allow them to buy any mortgage with any terms and conditions, underwriting, etc.?

Yeah, that's the ticket. No appraisal loans. Low credit score loans with 3% down. Anything goes loans.

 

[J Grant]

What do you think will happen if he privatizes mortgages with higher down payments and commensurate higher interest rates ? Home prices will plunge, which he thinks is the answer to making homes affordable. The real block to home ownership is lack of income and student loan debt for the younger generation..

There are affordable homes now, except many dont want to live in them. Buy a small starter house in and expand it later, or a house needing work and repair it or buy a manufactured home or villa. Those are affordable housing options, but like wanting to lease or finance a fancier car than they can buy with cash, people donf' want to purchase a home they can actually afford with cash or a large down payment .

How many buyers walk into a RE agent office and first thing they say is "I don't want a house that needs any work" So they over pay for some flip sale cheap cosmetic makeover or a builder over priced new home. Give courses on repair and /avail 203k repair loans, etc,

 

[ucbruin]

Whether it's a market correction or price collapse, the coming few years should be fun for the folks here who were screaming the last couple of years about how hot the market is and how high SC prices can be supported because a house has multiple offers and any appraiser who does not meet a SC price is "ignoring" the contract etc. With lots of free time on their hands and seeing housing prices fall, investors will start reviewing appraisals...what piece of junk loan did they just buy?

Believe it or not I agree with the majority of ALL your posts you share on the AF.....
But this post of yours clearly supports the notion that you, consciously or unconsciously, appraise purchases below contract to "protect" yourself from lender scrutiny should the market tank and/or correct....

 

[Randolph Kinney]

What do you think will happen if this clown gets in and privatizes mortgages with higher down payments and commensurate higher interest rates once lower down payment and govt insurance goes away?

Government is stuck, it owns the GSEs. It would first have to transfer ownership to a private entity. That entity would be regulated by the SEC if it sells securities. And assuming it went public with a stock offering, it would be regulated again the the SEC.

Who would invest in the new entity? That is who takes the risk. As far as buying mortgages, why would they take crappy paper?

 

[J Grant]

Believe it or not I agree with the majority of ALL your posts you share on the AF.....
But this post of yours clearly supports the notion that you, consciously or unconsciously, appraise purchases below contract to "protect" yourself from lender scrutiny should the market tank and/or correct....

That's a silly assumption, why don't you just ask me instead? I would not be in business if I Did that as a matter of course, and I was very busy the last few years, and many SC prices were met or exceeded in MV opinion. But some were not...and when the MVO was lower nearly always seller reduced price and deal went forward.

There is a difference between not wanting to over value property and deliberately coming in "low"...many of the posts here ( read the threads ) of how to "support" a SC way above recent sale prices or listings were about how hot the market was, how a high price listing should be weighted as if it were a sale etc.

 

[Elliott]

From WSJ today:

"Mr. Calabria holds iconoclastic views of mortgage-finance matters and has been critical of some of the basic foundations of the U.S. mortgage market, advocating for the elimination of government support for the 30-year fixed-rate mortgage and for banks to hold more of the loans they originate. He has also mused publicly on Twitter about imposing penalties for borrowers who repay their loans early as well as setting household-income limits for loans backed by Fannie and Freddie.

Mr. Calabria also has questioned the legality of the current arrangement by which the Treasury Department collects the profits of Fannie and Freddie in exchange for its nearly open-ended support of the mortgage-finance giants since the 2008 crisis. That position sides with shareholders of the firms who have challenged in court the FHFA’s administration of the companies.

If confirmed, he would play a pivotal role over the biggest unresolved legacy from the financial crisis: what to do with the failed mortgage-finance companies a decade after their government takeover at the height of the financial crisis.

Mr. Calabria’s nomination would be a loss for the housing industry. It had been pushing the White House to consider someone other than Mr. Calabria, who might advocate for more incremental steps to reduce the companies’ footprints in housing."
------------------
“He’s pragmatic,” said Dan Berger, president and chief executive of the National Association of Federally-Insured Credit Unions. “The reality is, I don’t think he’s going to do anything that is going to be massively disruptive to the housing-finance system in this country.”

 

[ucbruin]

That's a silly assumption, why don't you just ask me instead? I would not be in business if I Did that as a matter of course, and I was very busy the last few years, and many SC prices were met or exceeded in MV opinion. But some were not...and when the MVO was lower nearly always seller reduced price and deal went forward.

There is a difference between not wanting to over value property and deliberately coming in "low"...many of the posts here ( read the threads ) of how to "support" a SC way above recent sale prices or listings were about how hot the market was, how a high price listing should be weighted as if it were a sale etc.

All AF members, from time to time, have shared a "silly assumption"....

And I emphasis the word....
ALL!!!

 

[Randolph Kinney]

So the government should start up a new social program to guarantee housing for anyone making less $200,000. The government buys houses directly and sells the home to the qualifying buyer taking back a mortgage on the home at below market rates and terms. The buyer can't sell to the open market, only to the government.