MReport Jan 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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62 | TH E M R EP O RT SECONDARY MARKET THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T The Hidden Cost of Homeownership Freddie Mac unveils GreenCHOICE Mortgage program to address utility costs. T he monthly mortgage pay- ment is the most obvious cost of homeownership, but several other factors come into play in the total cost of owning a home. Freddie Mac is currently working to reduce and study one additional cost of home- ownership: utility costs. According to the latest data from the U.S. Department of Energy, Americans generally spend about $2,200 per year on energy bills, primarily on heating and cooling their homes. This cost is usually not factored into mortgage underwriting, "meaning that the value of energy efficiency has been overlooked in first lien financing," Freddie Mac explained. Freddie Mac is on a mis- sion to change that with its GreenCHOICE Mortgage program, which it is continuing to build. The GSE announced further en- hancements to the program, which provides financing for energy ef- ficiency improvements and energy efficient homes. Families can obtain financing for energy and/or water efficiency improvements to their homes, which will help lower their overall utility costs. Freddie Mac believes its GreenCHOICE program ultimately "places families in a better financial situation and helps preserve home affordability over time," the GSE stated in a November bulletin discussing the program. "Older homes tend to be more energy inefficient, which may raise the cost of homeownership and may make them more difficult to maintain," said Mike Dawson, VP of Single-Family Affordable Lending Strategy and Policy at Freddie Mac. He continued: "GreenCHOICE Mortgages is part of a multiyear initiative to facilitate energy-saving improvements that could help fami- lies better sustain homeownership." Freddie Mac is partnering with Rocky Mountain Institute, RES. NET, the Institute for Market Transformation, and the U.S. Department of Energy to con- duct further research and to promote further understanding of energy-efficient offerings. "With a deeper understanding of the value of energy efficiency, as well as an increased awareness of Freddie Mac's solutions and under- writing requirements, lenders will have more opportunities to expand their green product offerings in the marketplace," said Robert Sahadi, Senior Advisor to the Rocky Mountain Institute. Freddie Mac's GreenCHOICE Mortgages program is a compo- nent of its broader "Duty to Serve" plan, which is aimed at serving underserved markets, including rural and manufactured housing and other affordable options for buyers and renters with very low, low, and moderate incomes. Responding to Disaster Fannie Mae launches response network for disaster-affected homeowners. F annie Mae announced the launch of a comprehen- sive "action plan" to help homeowners who are impacted by natural disasters. The Fannie Mae Disaster Response Network™ is a comprehensive case-management service for di- saster-affected homeowners whose mortgage loans are backed by the company and is a supplement to the company's current post- disaster mortgage relief options. The program provides homeown- ers broader personalized support to address safety and basic needs, property repairs, employment, and financial recovery—all of which affect a borrower's ability to meet their mortgage obligations. "Communities face extraordi- nary challenges dealing with the impacts of a natural disaster," said Michael T. Hernandez, VP Disaster Recovery & Rebuild, Fannie Mae. "For homeowners, the process can be complex, stressful, and time-consuming. We want to help families regain their personal and financial footing beginning with mortgage relief, but also by helping more broadly to ensure a success- ful recovery." As part of Fannie Mae's com- mitment to disaster response, Hernandez addressed mortgage banking executives, servicers, and government representatives at Five Star's PR18. PR18 attendees discussed the current state of hous- ing in Puerto Rico and possible solutions and infrastructure the industry can put in place to aid recovery. Hernandez presented on affordable housing and key compo- nents for stabilizing communities and the local economy. "Fannie Mae's announcement demonstrates and further solidi- fies Fannie Mae's commitment to ensuring that homeowners are protected," said Ed Delgado, Five Star Institute President and CEO. "The weather and fire events of the previous two years serve as a sol- emn reminder of the inevitability of the occurrence of natural disasters. I applaud Fannie Mae's proactivity in taking steps to empower and educate borrowers so that they may quickly begin picking up the pieces when disaster strikes." Fannie Mae's Disaster Response Network is operated by Clearpoint Credit Counseling Solutions through their Project Porchlight program. Utilizing a call-center model, staffed exclusively by HUD-certified counselors within the United States, the Disaster Response network will help home- owners navigate the challenging and unfamiliar post-disaster recov- ery process and will include: A comprehensive case assess- ment and action plan designed to meet the homeowner's needs. Assistance in filing FEMA, insurance, and Small Business Administration (SBA) claims as well as providing additional referrals and resources for disaster recovery and resiliency. Tri-party calls with assistance providers and homeowners, plus ongoing counselor-homeowner check-ins to help ensure a success- ful recovery. A web-based platform designed to educate borrowers, provide resources and updates and create a supportive online community of neighbors facing similar challenges. Fannie Mae has said that homeowners with a Fannie Mae-owned loan whose property is in a FEMA-declared zone are eligible for free assistance from the Disaster Response Network. If the home was not damaged, but the borrower's employment/income was negatively affected, they are still eligible for the program.

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