FHFA Announces HARP Education Effort

The Federal Housing Finance Agency (FHFA) announced a new program Monday that will seek to educate homeowners on potential refinancing options under the Home Affordable Refinance Program (HARP). The program aims to inform underwater homeowners of expanded HARP eligibility requirements and encourage homeowners to discuss refinancing options with their lenders.

“To date, more than 2.8 million homeowners have refinanced through HARP,” said FHFA Acting Director Edward DeMarco. “With the launch of this campaign we look forward to reaching those homeowners who may not know about the program or understand the eligibility criteria to take advantage of today’s low interest rates by refinancing through HARP.”

In order to publicize the program, FHFA has recruited HGTV personality Mike Aubrey to help promote HARP. “Harp is an absolute no brainer for eligible homeowners . . .”

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FHFA Releases Updated Strategic Plan

By Krista Franks Brock

The Federal Housing Finance Agency released a revised Strategic Plan for the years 2013 through 2017 Tuesday. The plan is a modified version of the plan FHFA Acting Director Edward DeMarco presented to congress in February.

“The initiatives and strategies set forward in this plan will serve to improve current mortgage processes, inspire greater confidence among prospective market participants, and set the stage for recovery and an improved future system of housing finance,” DeMarco stated with Tuesday’s release.

The plan details four major goals for the FHFA over the next few years. The first goal is to ensure “safe and sound housing Government-Sponsored Enterprises (GSE).”

Second is to create “stability, liquidity, and access in housing finance.”

Third is to “preserve and conserve” GSE assets.

Fourth is to “prepare for the future of housing finance in the United States.”

The first goal will require annual on-site examinations of each GSE, initiate new policies and supervisory guidance, and evaluate compensation and incentives at both GSEs.

The goal of creating liquidity and stability will involve potential risk-sharing options, promoting home retention programs, and enhance REO disposition programs for Fannie Mae and Freddie Mac.

The third goal – that of preserving assets – involves several steps to implement refinancings, modifications, deeds in lieu, and short sales. Another aspect of goal three is establishing underwriting guidelines that would help prevent future losses.

The FHFA will also continue to evaluate guarantee fees and make alterations to align them with risk.

The last goal set forth in the Strategic Plan is to set a path for the future of housing finance. “There are significant public policy questions and choices ahead on how to achieve an appropriate balance between the role of the private sector and the role of the U.S. Government as housing finance conditions change,” according to the Strategic Plan.

FHFA will work toward reducing the role Fannie Mae and Freddie Mac play in the housing market and promoting private sector participation.

As part of paving the way toward a stable housing finance system in the future, FHFA will “create robust and standardized pooling and servicing agreements,” “develop a new system for document custody and electronic registration of mortgages, notes, titles, and liens,” and “complete the implementation of the Uniform Mortgage Data Program.”

California Realtors Slam FHFA Over "Highly Secretive" REO Program

By: MortgageOrb.com

The California Association of Realtors (CAR) has criticized the Federal Housing Finance Administration (FHFA) for moving ahead with its real estate owned (REO) bulk sales pilot initiative in a manner that the trade group refers to as a "highly secretive manner, despite vehement opposition from California congressional members, the negative economic impact to the state’s housing market, and cost to taxpayers."

CAR adds that it is filing a request for details through the Freedom of Information Act. The REO bulk sales pilot program calls for the sale of nearly 500 Fannie Mae-owned foreclosed homes in the Los Angeles and Inland Empire areas to yet undisclosed institutional investors.

"We are disappointed that Fannie Mae and the FHFA fail to understand that this initiative will harm the communities in which it will be implemented and are going forward with this ill-conceived plan," says CAR President LeFrancis Arnold. "Moreover, not only are Fannie Mae and FHFA moving forward with the plan, they are refusing to disclose any details, such as property locations, final property count, sales price or names of winning bidders.

"We are also greatly concerned that the FHFA used extremely outdated market data, perhaps as old as [from] 2011, to determine property valuations," Arnold continues. "Because the transactions are only now in the process of closing, these dated valuations will drag down the Inland Empire’s home prices, which have shown strong signs of stabilization. Additionally, because of this price discrepancy and the very nature of bulk sales, we believe Fannie Mae is assured to not receive fair market value for the properties, thereby saddling taxpayers with their loss."

FHFA Significantly Concerned Over Eminent Domain Proposal in California

By: Esther Cho – DSNews.com

FHFA issued a notice Wednesday to warn of the controversial use of eminent domain recently proposed in San Bernardino County.

In San Bernardino County, officials are considering the use of eminent domain to seize underwater mortgages. The mortgages would be taken at fair market value, and then restructured into new loans with terms reflecting the current market. Chicago and Berkeley are also exploring the proposed use of eminent domain.

In the notice, which was sent to the Federal Register, FHFA stated it had “significant concerns about the use of eminent domain to revise existing financial contracts and the alteration of the value of Enterprise or Bank securities holdings.”

FHFA said that in relation to the Fannie Mae and Freddie Mac, the use of an eminent domain program could result in a cost to taxpayers.

FHFA also stated it had significant concerns regarding a “chilling effect on the extension of credit to borrowers seeking to become homeowners and on investors that support the housing market.”

As conservator for the GSEs and as a regulator for Federal Home Loan Banks, FHFA stated it may need to take action “to avoid a risk to safe and sound operations and to avoid taxpayer expense.”

Along with concerns, the agency also raised several questions, including the constitutionality of the proposed use of eminent domain; the effects on holders of existing securities; and the impact on millions of negotiated and performing mortgage contracts.

FHFA said it is accepting input on topic through its Office of General Counsel (OGC) no later than September 7, 2012.

Views on the topic may be emailed to eminentdomainOGC@fhfa.gov or sent to FHFA OGC, 400 Seventh Street SW., Eighth Floor, Washington, D.C. 20024. Input may be made public.