Fannie and Freddie Lead Home Loan Risk Decline

first_img November 26, 2019 1,128 Views  Print This Post Demand Propels Home Prices Upward 2 days ago Fannie Mae Freddie Mac Risk 2019-11-26 Seth Welborn Tagged with: Fannie Mae Freddie Mac Risk Data Provider Black Knight to Acquire Top of Mind 2 days ago Credit tightening increased in August, as the American Enterprise Institute’s (AEI) Composite National Mortgage Risk Index (NMRI) for purchase loans declined 0.3 percentage points year-over-year, the third month for this trend. This result has been led by Fannie and Freddie, but in August, FHA also declined 0.3 ppt year-over-year.AEI’s NMRI uses the 2007-08 financial crisis as the stress event, covering nearly all loans originated since September 2012 that have a government guarantee to track risk in the mortgage market.“Interestingly, credit tightened for first-time buyers but remained unchanged for repeat buyers, in a significant trend reversal,” AEI notes. “Credit has slightly tightened for the last three months. Time will tell whether this trend continues.”Additionally, while new single-family home sales dropped month-over-month in October, first-time buyers still made up a large chunk of agency purchase loans. New single-family home sales were at a seasonally adjusted annual rate of 733,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development, and according to AEI Housing Market Indicators report, first-time buyers (FTB) accounted for 56.8% of agency purchase loans.In its report, the AEI notes that though first-time buyers make up over half of all agency purchase loans, this number is down 1.1 percentage points year-over-year, with the largest declines coming from GSE and VA loans, indicating a pause in credit easing. First American has noted that the decline in the share of agency loans with a DTI greater than 43 has been most pronounced.In its report, AEI tracked the progress on housing finance reform under Treasury’s September 2019 report pursuant to the Presidential Memo from 2019. According to AEI, the FHFA should evaluate its “support for cash-out refinancings, investor loans, vacation home loans, [and] higher principal balance loans.”“The GSEs core mission should be to assist low and moderate income homebuyers in acquiring a primary residence,” AEI adds. “Starting today we will be tracking Housing Finance Reform from the GSEs’ perspective in regards to this core mission and progress being made on the steps outlined in the Treasury report.” Share Save The Best Markets For Residential Property Investors 2 days ago Fannie and Freddie Lead Home Loan Risk Decline Home / Daily Dose / Fannie and Freddie Lead Home Loan Risk Decline Data Provider Black Knight to Acquire Top of Mind 2 days ago Sign up for DS News Daily in Daily Dose, Featured, Government, Market Studies, Newscenter_img Servicers Navigate the Post-Pandemic World 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago About Author: Seth Welborn Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Previous: Where Investors Should Show Caution Next: Reassuring News for Housing Investors The Best Markets For Residential Property Investors 2 days ago Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer. Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Related Articles The Week Ahead: Nearing the Forbearance Exit 2 days ago Demand Propels Home Prices Upward 2 days ago Subscribelast_img read more

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