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34 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t HUd secretary details Blueprint for credit access Independent study fInds lenders are mIssIng out on 1.2 mIllIon loans each year because of tIght credIt. WASHINGTON D.C. // HUD Secretary Julian Castro shared the points of his depart- ment's Blueprint for Access in a late-October speech. The goal of Castro's plan is to ease the risk of lending while expanding credit. "It's in our entire nation's interest to help more responsible Americans succeed in the hous- ing market by expanding access to credit," Castro said. "Some believe that a few years ago, it was too easy to get a home loan. Now, it's too hard. In fact, accord- ing to the Urban Institute, the housing market is missing out on 1.2 million loans every year be- cause credit is so tight. And even Ben Bernanke recently said that he's having trouble refinancing his mortgage. If the former Fed chair is having trouble, imagine the frustration of average folks. The pendulum has swung too far in the other direction. There's been a vacuum in the market, and it needs to be filled. Thankfully, we're already starting to see movement." Castro encouraged lenders who have not done so to expand their credit, asking them if they wanted to "leave business on the table" by passing over the 1.2-million-loan "market opportu- nity" he referenced in his opening statement. "All parties would benefit if you took action and expanded your reach. And I urge you to do so," Castro said. "But, I'm also aware that government must take action by shaping an environment where good lenders and good borrowers can work together without reservation. This means creating more certainty for you, which is a top priority at HUD. In the wake of the crisis, we've seen a lot of frustration from lenders when it comes to their FHA business." Castro then detailed the Blueprint for Access, which includes three key points. First, he said, HUD is overhauling its Single Family Housing Policy Handbook, and the first major section of the revised version (which covers loan originations) has already been published with changes made based on feedback received from lenders. Castro said HUD is accepting feedback for additional sections of the handbook and he expects it to be largely completed by next year. "This is an important accom- plishment and should give you confidence that you understand FHA's policies and its expecta- tions for compliance," Castro said. The second main point of the plan is the development of a Supplemental Performance Metric, which is intended to give a more complete portrayal of a lender's portfolio performance. The current metric measures only a lender's default performance against that of its peers in a local market, which "doesn't paint a complete picture," Castro said. "The Supplemental Performance Metric addresses this by focusing on a lender's perfor- mance compared to those also doing business in the credit score range that FHA is targeting," Castro explained. "We're final- izing this work and expect it to be available early next year. This will minimize the 'Credit Watch Termination' risk for lenders mov- ing to support credit-worthy bor- rowers with lower credit scores when their peers do not." The blueprint's third key point is the Loan Defect Taxonomy, which Castro said is currently in draft form. "This is a new way of looking at loan defects, and it's going to be a critical tool for our partners," Castro said. "FHA historically has used 99 different codes to describe defects in loans. The taxonomy will bring this down to nine distinct categories and offer some new insight into the significance of the deficiency. This new approach will give lenders the informa- tion they need to clearly identify where their challenges are and allow them to make changes. It will allow FHA to monitor trends in deficiencies and determine if policies can be enhanced to help lenders avoid deficiencies." Castro told the lenders in the audience he believes the Blueprint for Access will "bolster your con- fidence so that you can originate more loans to credit-worthy bor- rowers in FHA's credit box." Florida sees rising Home sales, Prices some fear the recent gaIns could push fIrst-tIme and low-Income buyers out of the market. FLORIDA // Florida's housing market posted improvements across the board in September, with closed sales, home prices, new listings, and inventory all moving upward, according to data from the state's Realtor group. Florida Realtors reported closed sales of single-family homes totaled 20,792 in September, an increase of 13.5 percent over September 2013. Closed sales ORIGINATION LocaL Edition "Some believe that a few years ago, it was too easy to get a home loan. Now, it's too hard." —Julian Castro, hud