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TH E M R EP O RT | 63 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 LOCAL THE LAT- Neighborhood Stabilization Initiative Facilitated $92M in Property Sales Last Year THE PROGRAM, WHICH WAS EXPANDED TO 18 MARKETS AT THE END OF 2015, OFFERS ORGANIZATIONS AIMING TO STABILIZE NEIGHBORHOODS FIRST DIBS ON REO PROPERTIES. DISTRICT OF COLUMBIA // The expanded Neighborhood Stabilization Initiative (NSI) pro- gram marked its one-year anniver- sary in December, according to an announcement from Washington, D.C.-based National Community Stabilization Trust (NCST). The program, through NCST, provides organizations working to stabilize neighborhoods with access to REO properties from Fannie Mae and Fannie Mac. "The NSI program assists those communities in our nation whose housing markets continue to struggle," said Rob Grossinger, President, NCST. "By providing this "first look" to organizations supporting neighborhoods, Fannie Mae and Freddie Mac strengthen local housing markets and provide new opportunities for homeown- ership and affordable rental." As a result of the initial program's success, on December 1, 2015, Fannie Mae and Freddie Mac expanded NSI from the two pilot areas to a total of 18 strate- gic markets with large concentra- tions of distressed and low-value inventory. Further, according to NCST, during the past year, buyers have purchased 1,372 NSI properties for approximately $92 million. "In these markets, acquisi- tion plus renovation costs often exceed the post-renovation value," said Julia Gordon, EVP, NCST. "By helping our local partners save on acquisition costs, NSI has enabled them to return distressed properties to the housing stock in rehabilitated condition and to help build wealth in communities that have been left behind by the housing recovery." Additionally, Fannie Mae and Freddie Mac have made additional improvements that will make NSI more effective for low-value prop - erties and for properties in higher- cost areas, according to NCST. "As we work to lift home val- ues in metro Atlanta's distressed neighborhoods, it is important that REO holdings be part of the solution. The NSI program is providing our organization with a great opportunity to boost our acquisition of single-family homes, accounting for more than 30 percent of our produc - tion in the last 12 months," said John O'Callaghan, President and CEO of Atlanta Neighborhood Development Partnership. Credit Union Group Opposed to Full Privatization of GSEs THE NATIONAL ASSOCIATION OF FEDERAL CREDIT UNIONS PRESIDENT WORRIES FULL PRIVATIZATION WOULD PRECLUDE COMMUNITY-BASED INSTITUTIONS FROM THE SECONDARY MARKET. The topic of housing finance reform has been revived as of late as analysts and stakeholders debate what would be the most effective way to end the govern - ment's conservatorship of Fannie Mae and Freddie Mac. From dis- solving the GSEs and replacing them with a government corpo- ration to completely privatizing the enterprises, opinions differ as to how effective GSE reform should look. The National Association of Federal Credit Unions (NAFCU), a trade union representing the interests of the nation's 106 million credit union members, has some ideas of its own. NAFCU President and CEO Dan Berger wrote a letter to House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Ranking Member Maxine Waters (D-California), and Senate Banking Committee Chairman Richard Shelby (R-Alabama) and Ranking Member Sherrod Brown (D-Ohio), urging the lawmak - ers to keep certain principles in mind when Congress is drafting a plan for GSE reform. Berger said he believes that a "healthy, sustainable, and viable" secondary mortgage market must be maintained and that credit unions should have "unfettered, legislatively-guaranteed access" to that market. Berger wrote that there should be competition in every aspect of the market and that the Federal Home Loan Banks—of which GSE regulator Federal Housing Finance Agency (FHFA) is also conservator—are important to the market be - cause they "provide credit union members with a reliable source of funding and liquidity." The NAFCU would support merging Fannie Mae and Freddie Mac into one entity if the needs of credit unions could still be met—but Berger does not support the full privatization of the GSEs because he is concerned that do - ing so would shut out commu- nity-based institutions from the secondary market, Berger said While he said the federal gov- ernment should play a "pivotal" role in the secondary market, at the same time, he suggested, "the GSEs should be self-funded, without any dedicated govern- ment appropriations." "NAFCU understands that this is a complex issue that is expected to be a priority in the next Congress and with the in- coming Trump Administration," Berger wrote. "We welcome the opportunity to work with you as you move forward on compre- hensive, thorough, and prudent changes to our nation's housing finance reform system." LOCAL "As we work to lift home values in metro Atlanta's distressed neighborhoods, it is important that REO holdings be part of the solution." —John O'Callaghan, President and CEO, Atlanta Neighborhood Development Partnership SECONDARY MARKET