Why Are Fannie And Freddie In Such A Hurry?

[Artemis Fowl]

Send them to Detroit

Hey now...enough on Detroit's plate already. Then again...make 'em walk thru Detroit neighborhoods to work everyday just might be effective.

 

[J Grant]

Fannie is having quite the bromance with Quicken Loans these days.

 

[hastalavista]

I know a couple of people that work for Quicken Loans.
They've been used as a "beta tester" for a couple of Fannie ideas; one of them being how accessory units were to be identified on the 1004 form (which I posted about last year when I learned about it).

Conspiracy theorists aside, if you are Fannie or Freddie transacting on a national level and you want to try something out, are you going to use a small-market player (or a number of them) for that test or are you going to use a large-market player that has the same footprint as you do?
My point is, drawing lines to connect dots and then arguing there is a connection might be a lot of fun... and conspiracies do exist. But sometimes the obvious explanation may be the correct explanation.
Just something to consider.

 

[hastalavista]

Send them to Detroit

I seem to recall that a congressman (Republican I think) had an idea a few years ago that made some sense to me:
He said that concentrating all the main government agencies/departments in DC might have made sense for the past 200+ years, but doesn't make any sense now due to the differences in communication. He also cited the high-price of housing in the DC area as well as the high price of building, and ended his point by saying something like, "When you concentrate all these people/staff/agency heads in DC, they lose touch with the people they are supposed to serve." So, his idea was to move some agency/department headquarters out of DC and into different parts of the country... Detroit being one of them as that would (a) give a boost to that local economy and (b) be a much more affordable place to live for staff members.

I liked the idea, for all the reasons he cited.

 

[J Grant]

I know a couple of people that work for Quicken Loans.
They've been used as a "beta tester" for a couple of Fannie ideas; one of them being how accessory units were to be identified on the 1004 form (which I posted about last year when I learned about it).

Conspiracy theorists aside, if you are Fannie or Freddie transacting on a national level and you want to try something out, are you going to use a small-market player (or a number of them) for that test or are you going to use a large-market player that has the same footprint as you do?
My point is, drawing lines to connect dots and then arguing there is a connection might be a lot of fun... and conspiracies do exist. But sometimes the obvious explanation may be the correct explanation.
Just something to consider.

Imo, a conspiracy theory is more commonly used to mean a kind of paranoid suspicion , or an actual criminal type conspiracy. Commenting on something that is going on does not mean one holds conspiracy theories about it...fwiw.

That said, Fannie and the big box lenders have a history of bail outs, conservatorship , risky lending, fraud re toxic loans securities etc. Not exactly a most trustworthy history. Granted that some individuals are trustworthy and there have been reforms, the climate now is roll back reforms and regulations...how did that work out the last time ? )

USing Quicken as a beta tester is one thing, re shaping policy and making changes ( which some consider risky) to accommodate certain lender's interests is another.

Quicken Loans are all into QUICK, fast, rocket mortgage, lending should be an app like ordering an UBER ride...and Fannie is changing their policies to pave the way for that ( which pressures other lenders to adapt these practices and race instead of using diligence and prudence.

Fannie in partnership with Quicken accepting Airnb income to qualify buyers, Amrock testing "modified " 1004 form for possible pilot use...hybrids to replace traditional appraisals offers no benefit other than speeding up a loan....should it be sped up? ( at rhe risk of sound policy and time share like pressure on borrowers to trap them into fast decisions they may regret later )

Some things just take time for a reason. UBER app can order a ride instantly, but to be safe the driver has to obey the speed laws An Uber driver does not get you any faster from point A to point B than a taxi driver does for that reason. Technology blah blah it was just an app stupid... once on the road safety and traffic and laws are in play.

 

[NC Appraising]

I know a couple of people that work for Quicken Loans.


Fannie or Freddie transacting on a national level and you want to try something out, are you going to use a small-market player (or a number of them) for that test or are you going to use a large-market player

I agree with the above, but I think you are missing the point. Now I could be wrong, I have no personal insights or connections with Fannie Mae.

The question is this: who or what company is "pushing this"? Is it Fannie Mae or the largest mortgage lenders? Why is Fannie Mae so concerned about a separate corporate entity improving their profits?

ttribute to Dave Lowman, Executive Vice President, Single Family Division, Freddie Mac:

“We are proud to join Quicken Loans in a new partnership dedicated to increasing homeownership opportunities and simplifying the process of originating and delivering high quality mortgages. The partnership has a simple goal. We are leveraging our unique strengths to explore simple straightforward approaches to mortgage products, technology


Read more at https://www.quickenloans.com/press-...ccessible-for-new-buyers/#klE0oUYCy0qdfWOy.99



Think about it. A borrower needs a mortgage loan. If Quicken does not do it, maybe a local credit union will. The point is that the loan will get done, by someone, and more than likely, it will be shipped to Fannie and Freddie. It's not like....well, if Quicken cannot do it in a week, the borrower will go with a lender in China and Fannie will be taken out of the equation.

Fannie and Freddie should be a silent partner, as they pool, buy, packaged, whatever you want to call it from the largest lender to the local loan officer at a community bank.

https://www.quickenloans.com/blog/q...mplifies-income-asset-employment-verification
https://www.quickenloans.com/press-...ake-home-financing-accessible-for-new-buyers/

 

[hastalavista]

Fannie in partnership with Quicken accepting Airnb income to qualify buyers, Amrock testing "modified " 1004 form for possible pilot use...hybrids to replace traditional appraisals offers no benefit other than speeding up a loan....should it be sped up? ( at rhe risk of sound policy and time share like pressure on borrowers to trap them into fast decisions they may regret later ).

(my bold)
That's an easy one to answer; No, they should not be sped up if it risks sound policy.
I think that's why it is in a testing pattern rather than just adopted, no?

As to pressuring borrowers to trap them into fast decisions they may regret later, where do you draw the line on limiting an individual's freedom to make decisions on their own behalf?
I refinanced a property 2-years ago. I had to sign more disclosure papers advising me of everything I should know than when I joined the military. You want to add a "cooling off" period of a week before a transaction can close to protect the one consumer who cannot restrain himself at the expense of the rest who can? Let's say that happened... that isn't going to impact what's happening with the appraisal process.

 

[J Grant]

Just my thoughts on the matter...D Wiley honestly answered the big push behind hybrids replacing a segment of traditional appraisals is so banks can get more $ from closing a day sooner. Vs the impact on borrowers and y markets of rushing things ro accommodate that. Is Fannie supposed to be a neutral entity or be more concerned with public trust/secondary market safety or more concerned with private companies making more profits.? ..

I did not suggest a cooling off period of a week but the new policies rush things faster than existed 2 years ago (or now )

 

[hastalavista]

I agree with the above, but I think you are missing the point. Now I could be wrong, I have no personal insights or connections with Fannie Mae.

The question is this: who or what company is "pushing this"? Is it Fannie Mae or the largest mortgage lenders? Why is Fannie Mae so concerned about a separate corporate entity improving their profits?

Think about it. A borrower needs a mortgage loan. If Quicken does not do it, maybe a local credit union will. The point is that the loan will get done, by someone, and more than likely, it will be shipped to Fannie and Freddie. It's not like....well, if Quicken cannot do it in a week, the borrower will go with a lender in China and Fannie will be taken out of the equation.

Fannie and Freddie should be a silent partner, as they pool, buy, packaged, whatever you want to call it from the largest lender to the local loan officer at a community bank.

https://www.quickenloans.com/blog/q...mplifies-income-asset-employment-verification
https://www.quickenloans.com/press-...ake-home-financing-accessible-for-new-buyers/

If you look at Fannie's income pattern, whether a loan closes in 5 days or 50 days isn't going to impact them except for the period of transition from one to another.
So, I agree with you, from their perspective, it doesn't really matter. To use JGrant's analogy, it doesn't matter if you drive 10mph or 50mph, if its going to the GSEs, its going to get there sooner or later.

But here is what Fannie says about itself (http://www.fanniemae.com/portal/about-fm/what-we-do.html) (my bold for emphasis):

Fannie Mae serves the people who house America. Our mission is to provide access to reliable, affordable mortgage financing in all markets at all times.

Fannie Mae is a leader in providing housing finance for homebuyers and renters in the United States. We serve the people who house America. Together with our partners, we make sure that homeowners, homebuyers, and renters across the country have access to affordable financing opportunities.

Fannie Mae aspires to be America's most valued housing partner. We provide our customers with products and tools they need to enable mortgage lending in the 21st century. We provide technology and risk tools to help our customers advance their businesses. We listen to and support our customers to make the mortgage process more efficient and effective.

We continually work to improve the way we operate because we want to make the housing finance system safer and more effective for our company, our customers, homeowners, homebuyers, renters, and for America.

That's what it does.
Now, naturally, it is supposed to do that in a safe and sound manner. And I'm not discounting any concerns about what happens if the appraisal is rushed; what usually happens if something is rushed is mistakes happen (eventually).
Fannie is looking at the entire loan process, working with its customers, and trying to identify areas where it can get done quicker and/or at a lower cost. That's what most businesses do. The legitimate concern is that they don't trade speed or savings for imprudent risk. That remains to be seen (especially with whatever they are proposing for the appraisal component, because while we may have a general idea of what a hybrid is, we have no idea of what the final hybrid product that Fannie will adopt, presuming they adopt one (which I do presume)).
But Fannie is telling us exactly why they are working with these various lenders and testing these various programs, and it should come as no surprise to us. They are doing it because "that's what they do".

 

[hastalavista]

I did not suggest a cooling off period of a week but the new policies rush things faster than existed 2 years ago (or now )

No, you didn't and yes, they do.

Just my thoughts on the matter...D Wiley honestly answered the big push behind hybrids replacing a segment of traditional appraisals is so banks can get more $ from closing a day sooner. Vs the impact on borrowers and y markets of rushing things ro accommodate that. Is Fannie supposed to be a neutral entity or be more concerned with public trust/secondary market safety or more concerned with private companies making more profits.? ..

(my bold)
Their "what we do" statement may give some insight to the bolded part.