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The Latest SECONDARY MARKET Or ig i nat ion MBA to Oppose GuaranteeFee Hike s e r v ic i ng The organization's CEO spoke out against the controversial bill that would raise fees on loans from the GSEs to provide funding for immigration initiatives. D Citing ongoing low interest rates and a healing labor market, the GSE is projecting a "solid" pace for housing recovery. any risk in this forecast, Fannie Mae says it's that housing demand may actually result in stronger housing activity than currently anticipated. Based on data from Fannie's home price index, home prices were poised to see an overall increase of 3.4 percent in 2012 and a 1.1 percent increase in 2013. Fannie was also optimistic about originations, which it said were on target to reach $1.81 trillion in 2012 and $1.54 trillion in 2013. The refinance share of originations was expected to rise to 71 percent in 2012 before dropping to 62 percent this year, according to the report. The 30-year fixed-rate mortgage is expected to stay low and average 3.5 percent in 2013. The GSE also expects the Federal Reserve to continue buying $40 billion in mortgagebacked securities (MBS) each month through 2013. Unemployment is expected to dip further into 2013 and fall to 7.6 percent. GDP is expected to grow at a rate of 2.2 percent in 2013. Even though reports on the housing sector give reasons to be optimistic, Fannie still warned "data continue to show a sluggish recovery overall." The GSE also noted consumer spending was the largest contributor of growth in Q 3. However, consumer confidence may be weakened in coming months due to the fiscal cliff and debt ceiling debate, which "are likely to create the most significant barriers to meaningful growth," Fannie Mae stated. In addition, Fannie's chief economist Doug Duncan cautioned that while the thirdquarter pickup in activity was promising, "it is compared to the weak pace seen in the second quarter and doesn't portend a robust recovery in the near term." The M Report se c on da r y m a r k e t G iven improvements seen in housing and the economy, Fannie Mae revised its housing forecast for last year and 2013 in its November economic outlook report. According to the GSE, the fundamentals are set in place for a "solid" housing recovery, such as low interest rates, rising prices, and a labor market that's healing. Considering these developments in housing, the GSE's Economic & Strategic Research Group anticipated single-family housing starts would jump 25 percent last year, then rise by another 22 percent this year. Existing-home sales also were on pace to tick up, with a projected 9 percent increase for 2012 and a 4 percent gain for 2013. When combining new and existing-home sales, the increase was expected to be 10 percent last year, adding an additional 6 percent in 2013. And if there's A na ly t ic s Fannie Positively Revises Forecast avid Stevens, president and CEO of the Mortgage Bankers Association, has voiced the group's opposition to House bill H.R. 6429, which would raise guarantee fees (g-fees) on single-family mortgages by Fannie Mae and Freddie Mac to pay for immigration reforms. The bill is designed to provide immigrant visas for qualified persons who "hold a doctorate degree in a field of science, technology, engineering, or mathematics from a United States doctoral institution of higher education" and who seek to put their skills to use in the United States. In his statement, Stevens asked Congress to keep housing funds away from other causes. "Fannie and Freddie's guarantee fees are supposed to be used to help offset the risk inherent in providing mortgages, and any increases to those fees should be used for that purpose," Stevens said. "Dipping back into the housing piggybank to pay for unrelated policy items on the backs of America's homebuyers sends the wrong message at a time when the housing market is starting to show signs of recovery." The statement goes on, "We are asking Congress to reconsider the approach of using guarantee fees for anything other than their intended purpose. Increasing the cost of most mortgages will only add to the uncertainty that is plaguing the mortgage market and holding back a more a robust housing recovery." | 73