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FEATURE in housing values, especially in markets hit hardest by the economic downturn," he said. "Mortgage companies are closing their lending platforms—one of the latest closures was MetLife, which had a national platform. CitiBank recently announced they were shutting down their whole- sale lending division. This shows a decided lack of confidence in housing and a fear of exposure on the mortgage lending side. Part of that fear is grounded in lack of confidence in housing values and part in fear of what the federal government will do next on the mortgage side of the equation." Robert Conway, president of Pareto Optimal Consulting, a Minneapolis-based consulting firm, echoed Badal. "The economics of the mortgage business have been difficult for the small to mid- size mortgage banks," he said. "The number of banks willing to warehouse smaller mortgage bankers has fallen, and so the access to lending to finance inventory has been reduced. Perhaps most important, the value of servicing has fallen by half for mortgage bankers be- cause of capital regulations such as the disincentives contained in Basel III . . . . Many large players already have too much capital locked up in servicing values, and there is an excess of servic- ing portfolios on the market." Badal noted the short-lived im- pact of the homebuyer tax credit as cited in the HMDA reports, "Attempts by the government to ameliorate the situation, such as the homebuyer tax credit program, have failed miserably, creating more uncertainty, frus- tration, and lack of confidence in a recovery," he said. "It stimu- lated some sales and then was closed down. Its other problem was it catered to only the low end of the market, while ignor- ing the vast remainder of the housing market." Uncertainty on the Horizon W hat the numbers say about the future is unclear. "I am more positive regard- ing housing markets because of the capital I see flooding into the distressed housing markets to buy up excess inventory," Conway offered. "With the FHFA likely putting bulk pools • Property value • Parcel identification number, at the option of the CFPB • Origination channel (such as retail loan officer or broker) • Originator identification number (as set forth in the Secure and Fair Enforcement for Mortgage Licensing Act, or SAFE Act), at the option of the CFPB • Borrower credit score, in a form determined by the CFPB • Borrower age The goal of the enhanced report- Homing in on Housing O ne of the main thrusts of the Home Mortgage Disclosure Act (HMDA) was, through disclosure, to address concerns about discrimina- tion in mortgage lending—discrimina- tion not only through creating higher standards for certain groups, but also through pricing. Limitations in the law fell short of those goals, but concerns about neighborhoods experiencing high levels of housing market distress have been a particular focus of public policy in recent years. And new HMDA reporting requirements enacted as part of 28 | THE M REPORT the Dodd-Frank Act were designed to deal with other housing market concerns. Under Dodd-Frank, future HMDA reports will include new informa- tion on loan terms, the property, the borrower, and perhaps a universal loan identification number. The last item was made optional at the discretion of the Consumer Financial Protection Bureau (CFPB), which didn't receive its opera- tional authority—according to the law that created it—until President Obama appointed former Ohio Attorney General Richard Cordray as its director. The expanded information includes: • Term to maturity • Total points and fees • APOR (average prime offer rate) spread for all loans, measured against a benchmark rate to be determined by the CFPB (now re- quired only for higher-priced loans) • Duration (and existence) of prepay- ment penalty • Indicator of whether mortgage has an adjustable rate • Length of introductory interest rate period for adjustable-rate mortgages • Presence of negative amortization feature ing is to root out information that might point to repayment concerns, with the belief that elevated levels of foreclosure and property abandon- ment can have a negative impact not only on those directly involved in the foreclosures—the borrowers—but also on others in the surrounding neighbor- hood. Those affects often create a self-reinforcing downward spiral that can adversely impact the quality of life in an area, leading to more foreclosures and distressed borrowers. Which Came First? S ociologists and economists have identified these concerns with a chicken-and-egg approach, reaching a split decision on whether foreclosures cause or are caused by neighborhood deterioration or an increase in crime. Congress as part of the 2008 Housing and Economic Recovery ACT (HERA) established and funded the