Stocks are stuck in a funk. The NYSE Composite Index is braced against overhead resistance going all the way back to July. But specific areas of the market are rising with a sweet lightness that reminds us that while the economy may be struggling in certain areas — like shale oil communities, for instance — there are other areas that are prospering and growing. Home builders are one such area.
For so many Americans, housing is where everything begins. Often, where a family lives shapes how they live—the jobs available to them, the educations their children receive, the health outcomes they experience, and the overall quality-of-life they enjoy. That’s why I’m happy to report that the housing market is reemerging as an engine of economic prosperity.
On Sept. 7, 2008, after six consecutive quarters of increased foreclosures, the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac into conservatorship. Nearly seven years later, housing finance policy stands frustratingly still. The policies of 2008, while everything else around us has changed, are locked in place. The government-sponsored enterprises (GSEs) remain in conservatorship, the housing comeback has been uneven, and the taxpayer remains at risk.
The “g-fees” that Fannie Mae and Freddie Mac charge to guarantee mortgage-backed securities are a central factor in housing finance. The Federal Housing Finance Agency is rumored to be close to announcing a decision about them—but in fact the agency has nothing to decide. In order to revive the private secondary-mortgage market, Congress instructed the FHFA to raise the fees, told the agency how to do it, and gave the agency a 2013 deadline. That deadline is long past. It is time for the FHFA to obey the law. (Subscription may be required.)
The federal regulator of Fannie Mae and Freddie Mac plans to lower the mortgage fees paid by some borrowers, but the move would amount to only modest help for risky buyers with checkered credit histories.
The regulator of Fannie Mae and Freddie Mac will direct the housing-finance firms to slightly cut mortgage fees for riskier borrowers, a decision that falls short of what housing advocates wanted and yet is likely to anger conservative politicians who wanted higher charges. (Subscription may be required.)
Interested in a reverse mortgage without a lot of hassles? Better get your application in fast. As of April 27, the federal government is imposing a series of extensive “financial assessment” tests that will make applying for a reverse mortgage tougher — much like applying for a standard home mortgage.