Photo by Erol Ahmed on Unsplash
I’ll save you the details and keep this short and sweet… Mel Watt the Director of the Federal Housing Finance Agency (FHFA) believes that Freddie and Fannie should go back to being private entities BUT (and that’s a Sir Mix-a-Lot sized BUT) Uncle Sam must provide a guarantee in case a 2008 sized meltdown happens again. Watt’s comments were spelled out in a detailed letter sent to the Senate Banking Committee on Tuesday. The letter went on to suggest that secondary market entities (meaning more than just 2… wink wink) must have mandated capital and liquidity requirements. Additionally, the letter suggested the preservation of the cash window utilized by smaller lenders and, of course, went into detail about creating a mortgage insurance fund that would cover any potential losses from a “catastrophic” event… they actually called it a “catastrophic guarantee” in the letter… we get the message everyone. We don’t want 2008 to happen again… it’s loud and clear.
In all honesty, it’s exciting to see the FHFA making comments that coincide with the reform bill that is being worked in Congress and the possibility of an expanded secondary market could lead to some exciting opportunities for us mortgage lenders.
Did you hear that the CFPB is looking for our help to shape the future of the agency? Yep, and their first request for information is on the use of Civil Investigative Demands… uhhh what now? Yea… they want us to help evaluate the current CID process and procedures to determine whether or not they are warranted. I think it would help if we (the public) knew exactly what that meant. Why can’t they just say...
“Hey, we’re looking for feedback on how well you think the agency is protecting your financial well-being. Here is a scale from 1-10 and you can write some comments below.”
Your friends from the CFPB
Too simple I guess… either way it will be interesting to see what comes of these requests for information. Maybe some of the pressure will fall off the mortgage industry and we can begin looking at the student loan debt crisis.
I want to leave you with 1 last thing. Refi’s are coming back… according to Ellie Mae they made up 40% of the closed loan volume in December. Blow off the dust on your old call lists and start marketing those cash-out deals! #longlivetherefi
The opinions expressed in this post are the sole view of the writer and do not reflect the opinion of Princeton Mortgage Corporation.