TheMReport — News and strategies for the evolving mortgage marketplace.
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June 2023 » thefivestar.com 47 June 2023 S P O N S O R E D C O N T E N T made. It's about keeping servicers ready for constant, real-time changes, and how each change impacts customer, investor, and com- pliance processes both today and tomorrow. On a related note, we're also now explor- ing huge policy challenges like how HUD and servicers can solve for FHA borrower hardships if the inflation fight leads to reces- sion (more below). This is a hot topic because Ginnie Mae pool rules make HUD hardship solutions more limited than FHFA solutions. I love questions and explorations like this because it forces us to speed innovation to meet ALL eventualities in a real-time policy era across ALL regulators, GSEs, and inves- tors. And the faster markets get each year, the more real-time policymaking is the norm. Inflation and Recession Impact on Policy and Innovation T o see how the market might impact homeowners, servicers, and policy later in 2023, consider these MBA stats: » Of all IMB-serviced loans in forbearance, 59% are Ginnie Mae loans, up from 43% in July 2020 » Of all depository-serviced loans in for- bearance, 38% are Ginnie Mae loans, up from 30% in July 2020 This implies hardships are growing on FHA loans, and they could grow further if the Fed's inflation fight leads to recession. Inflation has dropped as the Fed hiked rates 10 times in the last 14 months. CPI is down to 4.9% from a June 2022 peak of 8.9%, and Core PCE is down to 4.6% from a September 2022 peak of 5.2%. But the Fed's 2% target is way off, and the rate hikes haven't fully hit the economy yet. If it's a hard landing, FHA borrower strain must be addressed, and, as noted above, servicers, regulators, and fintech firms like Sagent are exploring solutions now. This level of coordination in our ecosys- tem says a lot about how far we've come. Regulators understand the value of mod- ern fintech. And fintech innovation leaders like Sagent remain synced with regulators to enable servicers to meet any and all market challenges. Other fintech firms short on innovation, market, or policy expertise get terrified by each market and policy "emergency." But, as we've said, it's not emergency policymaking. It's time to embrace real-time policymak- ing and its role in driving innovation. Sagent is proud to forge this path with and for our ecosystem. It's time to embrace real-time policymaking and its role in driving innovation.