May 19, 2019

Asset Manager, C-Suite, Default Manager, Investor, Operations, Quality Control, Industry News, Origination, Secondary Market, Servicing

5 Key Takeaways from the 2019 MBA Secondary

 

1. The Economic Big Picture

The Federal Reserve has backed off rate hikes for 2019, and recession fears have subsided for this year and next. A looming trade war with China and the uncertain impact of Brexit remain wildcards on the global economic scene.

2. Inventory Shortages Worsen

Entry-level inventory remains low due to soaring land and building costs coupled with a labor shortage. Some municipalities are experimenting with creative solutions like relaxing density and zoning regulations.

3. New Leadership and a New Push for Reform at FHFA

New FHFA Director Mark Calabria says the time for housing finance reform is now, while the economy and the housing market are strong. He is developing a roadmap for reform with the White House, aiming for privatization of Fannie and Freddie.

4. Modernization Underway at FHA, VA, RHS, and Ginnie

FHA, VA, RHS, and Ginnie Mae are all implementing major technology updates. Current compliance rules that discourage bank lenders from doing business with FHA are also under review with the goal of increasing the diversity and strength of counter parties.

5. GSEs Stronger Than Ever

The GSEs are set up better than ever to withstand a crisis. Their credit risk transfer programs continue to diversify risk, and technology improvements have beefed up underwriting and simplified the process. The GSEs are currently making adjustments to better support borrowers impacted by natural disasters.

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