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the latest Or ig i nat ion SECONDARY MARKET Industry Veteran Calls for Transparency, Collaboration in Washington s e c on da r y m a r k e t a na ly t ic s se r v ic i ng David Stevens says the industry has erred too much on the side of caution. M ortgage Bankers Association (MBA) president and CEO David Stevens took the stage at the group's 100th Annual Convention and Expo, reflecting on the last century in housing and shining a spotlight on today's challenges. In his speech, Stevens said one of the biggest ongoing issues is the market's balance, which has tilted in the last half-decade from too loose to overly cautious. "In correcting for the loose standards of yesterday, we have stifled access to the credit needed to drive this market, this economy. In our effort to be diligent in the face of a collapse in the housing market, policymakers all over town have been making hundreds of policy decisions to clamp down on risk; decisions that may make sense in isolation but in the aggregate are choking off credit," he said in prepared remarks. While he notes that the government's response to the economic crisis has seen its share of enforcement actions that may have made sense in 2009 and 2010, but today are impeding our economic health rather than supporting it." Among other examples, Stevens offered up the case of the GSEs, which he said "have all but eliminated the ability for any borrower with a low down payment and average credit score from "In correcting for the loose standards of yesterday, we have stifled access to the credit needed to drive this market, this economy." —David Stevens, Mortgage Bankers Association successes, he also says Washington needs to recognize and take responsibility for the shortcomings of its policies—a step he believes policymakers have been reluctant to take as they "continue to clamp down on risk, run up pricing on government lending, and pursue having access to a home loan at a reasonable price" by implementing loan-level price adjusters for those with less than pristine credit or higher loan-to-value ratios—all in the name of eliminating risk. "To be clear, after the GSEs were put into conservatorship, New Business Falls to 1.5-Year Low at Freddie Mac The GSE's portfolio shrinks again as purchases and acquisitions plummet. S eptember marked the third straight month of declining business for Freddie Mac, with purchases and issuances coming in at their lowest level in almost a year and a half. Freddie Mac's total mortgage portfolio shrank at an annualized rate of 4.3 percent in September, 60 | The M Report contracting at a slightly lessened pace compared to August's -5 percent growth rate. Through September, 2013's average monthly growth rate has been -2 percent. As of September 30, Freddie's portfolio has contracted through six of the year's first nine months. By the end of the month, its ending balance stood at $1.927 trillion. New business fell for the second straight month to a 2013 low, with purchases and issuances totaling approximately $28.2 billion—the lowest since April 2012 ($25.9 billion). Year-to-date, new business has totaled $382.5 billion. Multifamily new business volume was $1 billion in September and $18.8 billion for the year's first nine months. The GSE's portfolio of mortgage-related securities and other guarantees took a downturn after improving in August, no one would argue the gfees did not need to rise and sustainable lending had to be implemented," he remarked. "But, today, the GSEs are virtually printing money and the excess profits are going to the Treasury—all at a cost to homeownership and the broad recovery of the housing market." Adding to the complications is the risk of class action suits, settlements, Justice Department actions, and complaints from state attorneys, all of which discourage lenders from considering a borrower "on the bubble." Finally, Stevens said conflicts in rulemaking are hurting efforts to return private capital to the secondary market—a problem that could be avoided if policymakers would take more time to listen to the industry's concerns and make their work as transparent as possible. "We can help the economy find its footing at a time when it could really use a boost. As rates start to rise, the recovery will need every ounce of help from all sectors of the economy. The real estate finance business can be an ally to growth if the policymakers partner with us, rather than holding us back," he said. shrinking for only the third time this year at a rate of 0.2 percent. Single-family refinance loan purchase and guarantee volume was $16.4 billion, representing 62 percent of total single-family purchases or issuances—another signal of the fading interest in refinances. Relief refinance mortgages made up 39 percent of the mortgage giant's single-family refinance volume. The company's single-family seriously delinquent rate dropped to 2.58 percent, continuing the declining trend in delinquency rates. The multifamily delinquency rate was flat at 0.05 percent. Freddie Mac reported 6,685 loan modifications in September, totaling 60,431 for the year so far.

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