Page 55 - The GSE Report March-April 2018

GINNIE MAE
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...Despite its importance within the mortgage market, the FHA has been without a Senate-confirmed leader since 2014, stymieing the effectiveness of the organization and the ability of its staff to make meaningful policy adjustments as the market dictates.
In addition to Montgomery’s nomination, two other senior HUD nominees are awaiting confirmation—Robert Hunter Kurtz, as Assistant Secretary for Public and Indian Housing, and Seth Daniel Appleton, as Assistant Secretary for Policy Development and Research. (DS News, Rachel Williams, 04/20/18; National Mortgage Professional, Phil Hall, 04/27/18)
As FHA awaits the Senate confirmation of Brian Montgomery, FHA’s risk to taxpayers is increasing, according to congressional testimony by Dana Wade, acting FHA commissioner and general deputy assistant secretary for HUD. Wad told lawmakers that increases in the proportion of FHA borrowers with debt-to-income ratios exceeding 50%, the use of down payment assistance on FHA loans, and cash-out refinancing transactions could increase FHA’s exposure to loss. In February, the percentage of FHA borrowers with DTI ratios above 50% percent rose to 24.6%, up from 19.8% in the year ago period, while the average DTI ratio for the entire single-family portfolio increased from 42.7% in January to 42.9% percent in February, according to Wade. (nside Mortgage Finance, George Brooks, 04/26/18; Inside Mortgage Finance, George Brooks, 04/26/18)
GSES UNDER CONSERVATORSHIP
SERIOUS DELINQUENCY RATES
Meanwhile, seriously delinquent rates of FHA-insured loans have trended upward in the fourth quarter of 2017, according to Urban Institute. (Housing Finance at a Glance, Urban Institute, April
Serious delinquencies for single-family GSE loans, FHA loans, and VA loans moved up in the fourth quarter of 2017, partly due to seasonal factors, but mostly due to the impact of hurricanes Harvey, Irma and Maria. GSE
2018)
delinquencies remain high relative to 2005-2007, while FHA and VA delinquencies (which are higher than their
GSE counterparts) are at levels lower than 2005-2007. GSE multifamily delinquencies have declined to pre-crisis
levels, although they did not reach problematic levels even in the worst years of the crisis. In November 2017,
Fannie multifamily serious delinquency rate rose to 0.11 percent, its highest level since early 2014, mostly due to
SERIOUSLY DELINQUENCY RATES SINGLE-FAMILY LOANS
the recent hurricanes; it has remained at this level through February 2018. Freddie remained flat at 0.02 percent.
Serious Delinquency Rates–Single-Family Loans
Fannie Mae
Freddie Mac
FHA VA
10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0%
4.78% 3.43%
1.24% 1.08%
Sources: Fannie Mae, Freddie Mac, MBA Delinquency Survey and Urban Institute. Note: Serious delinquency is defined as 90 days or more past due or in the foreclosure process. Not seasonally adjusted. Last updated February 2018.
Serious Delinquency Rates–Multifamily GSE Loans
Percentage of total loans
1.0%
0.9%
0.7% 0.6% 0.5%
Fannie Mae Freddie Mac
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0.8%
2Q05 4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16 2Q17 4Q17