Are shared equity home ownership programs really the answer to bridging the U.S. wealth gap and homeownership accessible to more Americans? According to the panelists who presented during a National Housing Conference‘s webinar this week, the question isn’t whether shared equity programs work. The question is how do we preserve and create more of these programs.
Affordable housing has been an issue across the United States for many years. However, COVID-19 has in recentlly shed a light on the impact of increased costs on a community’s overall health. The National Housing Conference and NeighborWorks America recently joined forces to share how the impact of housing on a community and how collaboration can help bridge the gap between the two.
David Dworkin, CEO of the National Housing Conference, which represents a broad swath of mortgage industry and affordable housing stakeholders, hopes the FHFA will be less conservative in its interpretation of the GSEs’ charter. Dworkin said the GSEs must “not be in the risk avoidance business, but in the risk management business. Not taking any risk has its own set of consequences, which we are seeing now.”
Freddie and Fannie should also make sure the profit expectations underlying their loans aren’t such a stretch that owners must hike rents sharply to meet them, said David Dworkin, president and CEO of the National Housing Conference, a nonprofit promoting safe and affordable housing. Dworkin said the agencies shouldn’t make mortgage loans to an apartment project “that clearly requires raising rents for it to be viable,” he said.
Housing advocacy groups, mortgage lenders, and banks, came together on January 28, 2022 to take issue with the HUD’s proposed policies on defect taxonomy for loan servicing reviews. The defect taxonomy, as defined in article 8.0 of the Single Family Housing Policy Handbook 4000.1, is the FHA’s method of identifying defects at the loan level.
Although not specifically mentioned in a recent letter to the U.S. Department of Housing and Urban Development (HUD) regarding its most recent defect taxonomy proposals, the Home Equity Conversion Mortgage (HECM) program certainly applies to the overall goal of the correspondence as co-signed by nine consumer advocacy organizations.
In a joint letter to Lopa Kolluri, FHA’s principal deputy assistant secretary, the American Bankers Association, Americans for Financial Reform Education Fund, Center for Responsible Lending, Consumer Action, Housing Policy Council, National Consumer Law Center, National Fair Housing Alliance, National Housing Conference and the National Housing Law Project said HUD’s proposed defect taxonomy did not provide enough specifics on loan-level defects and remedies to be successful. The groups said HUD should not finalize the taxonomy before doing further engagement with stakeholders.
“We’ve learned a lot from the last housing crisis and how to reach homeowners and how to modify their mortgages to help them stay in their homes,” Dworkin says. “And we have such a shortage of housing stock, we don’t expect to see a market disruption because of unavoidable foreclosures.”
A newly formed group of big-name housing advocates—calling themselves the Underserved Mortgage Market Coalition—have called on Fannie, Freddie, and the Federal Housing Finance Agency (FHFA) to be more transparent about their plans and more aggressive about how they will pursue that mission going forward. “Amid a housing affordability crisis that requires bold and aggressive action, Fannie Mae and Freddie Mac have set forth plans that fail to effectively reach those not served or not served well by the conventional mortgage market” the coalition’s members wrote in a letter to FHFA Acting Director Sandra L. Thompson.
David Dworkin at the National Housing Conference says it was always intended to be a short-term fix. “The moratorium has prevented what could have been a devastating wave of evictions during the worst phase of the pandemic,” Dworkin said. But he says it has also cost landlords billions of dollars.
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