The FHFA’s forbearance extension to September is forcing nonbank servicers to buy out more delinquent loans. It's also upended loss estimates for investors and made racial and income disparities in the mortgage market worse.
The reduction currently under consideration by the Biden Administration would lead to even faster home price appreciation, especially in areas with moderate FHA presence, American Enterprise Institute’s Housing Director of Research Tobias Peter says.
Though the pandemic recession has driven up the delinquency rate on Federal Housing Administration loans, the president's appointees are widely expected to reduce mortgage insurance premiums by at least 25 basis points to make home loans less expensive.
Marcia Fudge told senators that her first priority as secretary would be to assist renters and homeowners struggling financially due to the COVID-19 pandemic.
The president’s executive action looks to assess the impact of the previous administration's alterations to the Affirmatively Furthering Fair Housing and Disparate Impact rules, while reinforcing Biden’s vow to eliminate discriminatory lending practices.
Bill Bynum, president and CEO of Hope Federal Credit Union, and Gail Laster, former director of the National Credit Union Administration's consumer-protection division, are working with the incoming administration.
The final version of the amended rule, like the original proposal, makes fair lending claims tougher to prove; but it does soften language that otherwise might have allowed mortgage companies to use algorithms to prove nondiscrimination.
Dana Wade, a former OMB official, says a strong capital footing will help the Federal Housing Administration weather an uptick in delinquencies and ensure the mortgage market is viable once the economy recovers.
