NEWS: Can Fannie and Freddie help fix the housing shortage?
Manufactured housing, construction products are on the agenda.
The challenges facing the mortgage market are many: a significant shortage of housing, rising interest rates and first-time homebuyers who need specialized underwriting are just the start. But leaders from Fannie Mae and Freddie Mac assured attendees at the MBA Secondary Marketing Conference on Tuesday that the GSEs were ready to partner with them to meet these challenges.
Desmond Smith, senior vice president and head of customer delivery at Fannie Mae, and Kevin Palmer, senior vice president of single-family credit risk transfer at Freddie Mac, outlined their agencies’ efforts to make the entire mortgage process simpler and easier. And that’s a good thing since the agencies facilitate the lion’s share — maybe even the elephant’s share — of the secondary mortgage market.
Fannie Mae’s Day 1 Certainty program, which gives rep and warrant relief to lenders who follow specific guidelines, continues to grow. Smith said that $300 billion of the deliveries the agency receives now contain at least one component of Day 1 Certainty. More than 70 vendors and sellers have partnered with Fannie on the program, which allows it to offer lenders a wide choice of services.
Likewise, Freddie Mac is looking to offer maximum flexibility to lenders. “We have been hearing customers talk around the broader theme of how can we make it faster, easier and more cost efficient to originate that loan? Making it cost efficient is more important today than ever before,” Palmer said.
The housing shortage that continues to plague the industry has no easy fixes. Smith said that half of the people employed in construction work left the industry after the housing crisis and up to 4 million homes have been diverted into rentals. In addition, the U.S. is contending with an aging housing stock that will need renovation investment. [via housingwire.com]
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