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Category Archives: Housing

Transitioning to Alternative Structures for Housing Finance

“More than six years after the federal government took control of Fannie Mae and Freddie Mac, policymakers are weighing a comprehensive overhaul of the mortgage finance system that could shrink or eventually close the two entities and create a system with more private capital. Fannie Mae and Freddie Mac were originally chartered as government-sponsored enterprises (GSEs) to ensure a stable supply of credit for residential mortgages nationwide. They operate in the secondary (or resale) market where they buy mortgages from the financial institutions that make the loans (thus ensuring that those institutions have a source of funds to originate new mortgages). Fannie Mae and Freddie Mac then pool those loans to create mortgage-backed securities (MBSs), which they guarantee against defaults on principal and interest payments by borrowers and sell to investors. Through its financial commitment to the two GSEs and its other mortgage programs, the federal government now directly or indirectly insures over 70 percent of all new residential mortgages. Loans guaranteed by Fannie Mae and Freddie Mac account for over two-thirds of those mortgages (about 50 percent of the total amount of mortgages), and loans insured by the Federal Housing Administration (FHA) make up most of the remaining federal share. Such government dominance was not always the case—in the 20 years before the financial crisis that began in 2007, roughly half of all mortgages were financed without backing from the federal government or either of the GSEs. As the effects of the financial crisis have receded and as the housing market has recovered, policymakers have taken some initial steps toward returning to a secondary mortgage market with more private-sector involvement. Those steps include raising the fees that Fannie Mae and Freddie Mac charge for their guarantees to levels that private firms may be better able to compete with. CBO expects that the steps already taken, together with pending changes to financial regulations, will reduce the two GSEs’ share of the mortgage market over the next 10 years. This report examines various mechanisms that policymakers could use to attract more private capital to the secondary mortgage market. The report also addresses how those mechanisms could be combined in different ways to help the market make the transition to a new structure during the coming decade. CBO analyzed transition paths to four alternative structures that involve choices about whether the government would continue to guarantee payment on mortgages and MBSs and, if so, what form and prices those guarantees would have. Under those different structures, the government’s activities would range from providing full or partial guarantees for a large share of the mortgage market to playing a minimal role in a largely private market (except perhaps during a financial crisis). Any transition to a new type of secondary market would also require decisions about what to do with the existing operations, guarantee obligations, and investment holdings of Fannie Mae and Freddie Mac.”

LexisNexis® Risk Solutions Releases Annual Mortgage Fraud Report

“LexisNexis® Risk Solutions announced the findings of its annual analysis of mortgage fraud in the U.S., revealing that despite improving economic conditions, mortgage fraud is still a national problem. In fact, mortgage application fraud and misrepresentation has grown for the past three years. Seventy-four percent of loans reported in 2013 involved some kind of fraudContinue Reading

2014 Livability Index of the 35 best cities for people 35 and under

The Livability Index: The 35 Best U.S. Cities For People 35 and Under  Our semi-exhaustive, largely scientific guide to America’s most livable cities, updated for 2014 “To reach our top 35, we started with the 100 most populous cities in America and used open-source Internet data to measure vital stats like salary and employment rates,Continue Reading

How Young Adults Today Compare With Previous Generations in Neighborhoods Nationwide

“Young adults today, often called the millennial generation, are more likely to be foreign born and speak a language other than English at home, compared with young adults in 1980, according to the U.S. Census Bureau’s latest statistics from the American Community Survey released today.  “Many of the differences between generations examined within these latest data reflectContinue Reading

Do Homeownership and Rent Subsidies Protect Individuals from Material Hardship?

Do Homeownership and Rent Subsidies Protect Individuals from Material Hardship? Robert I. Lerman and Sisi Zhang, November 2014. “Homeowners and subsidized renters experience significantly lower material hardship than unsubsidized renters, even after taking account of income, income variability, race, education, and family structure. Homeownership conveys more protection against hardship than do rent subsidies. Using the Survey ofContinue Reading

International Journal of Central Banking

International Journal of Central Banking (IJCB), December 2014 issue – Cover and contents Monetary and Labor Interactions in a Monetary Union  by Vincenzo Cuciniello Financial Stability and Central Bank Governance by Michael Koetter, Kasper Roszbach and Giancarlo Spagnolo The Aggregate Demand Effects of Short- and Long-Term Interest Rates by Michael T. Kiley Introducing Funding Liquidity Risk in a MacroContinue Reading

Coresident Grandparents and Their Grandchildren: 2012

“American households include a variety of living arrangements. Recent trends in increased life expectancy, single parent families, and female employment, increase the potential for grandparents to play an important role in the lives of their grandchildren. Increases in grandparents living with grandchildren are one way that the grandparent role has changed. This report explores the complexity of households in which grandparents andContinue Reading

Annual Homeless Assessment Report 2014

HUD – “This report outlines the key findings of the 2014 Point-In-Time (PIT) and Housing Inventory (HIC) counts conducted in January 2014. Specifically, this report provides 2014 national, state, and CoC-level PIT and HIC estimates of homelessness, as well as estimates of chronically homeless persons, homeless veterans, and homeless children and youth. All Homeless People:Continue Reading

New GAO Reports – Financial Audits of SEC, FHFA, Bureau of Consumer Financial Protection

FINANCIAL AUDIT: Bureau of Consumer Financial Protection’s Fiscal Years 2014 and 2013 Financial Statements, GAO-15-146R: Published: Nov 17, 2014. Publicly Released: Nov 17, 2014. FINANCIAL AUDIT: Federal Housing Finance Agency’s Fiscal Years 2014 and 2013 Financial Statements, GAO-15-147R: Published: Nov 17, 2014. Publicly Released: Nov 17, 2014. FINANCIAL AUDIT: Securities and Exchange Commission’s Fiscal Years 2014 and 2013 Financial Statements, GAO-15-166R: Published: Nov 17,Continue Reading

Municipal Response to Fiscal Distress in Detroit

Wilson, Meghan, City Auction: Municipal Response to Fiscal Distress in Detroit (November 4, 2014). Available for download at SSRN: http://ssrn.com/abstract=2519149 “Over the last decade, several metropolitan cities have been forced to think critically about their long-term financial solvency. This paper considers the tangible impacts of long-term financial planning in Detroit, Michigan. In July of 2013,Continue Reading

Common European birds are declining rapidly while less abundant species’ numbers are rising

Salon: “A new study published in the journal Ecology Letters paints a stark picture of our changing climate: 421 million birds have disappeared from Europe since the beginning of the 1980s, resulting in a 20 percent decrease. “90 percent of that decline can be attributed to the 36 most common species,” said lead author Richard IngarContinue Reading

Concentration of Poverty in the New Millennium – Paper

Concentration of Poverty in the New Millennium: Changes in the Prevalence, Composition, and Location of High-Poverty Neighborhoods by Paul Jargowsky. December 17, 2013. [Paul A. Jargowsky is a fellow with The Century Foundation, professor of public policy and director, Center for Urban Research and Education, at Rutgers University – Camden, and a senior research affiliate of the NationalContinue Reading