By Lew Sichelman
Columnist, National Mortgage Professional
NASHVILLE, Tenn. — It’s been ages since Uncle Sam used any of the three major trade association conventions as a forum to make major policy announcements. But the dam broke Monday at the Mortgage Bankers Association conclave.
Both the Federal Housing Finance Agency (FHFA) and Ginnie Mae heralded new initiatives. Of the three regulators speaking during a morning session, Federal Housing Administration (FHA) Commissioner Julia Gordon was the only one without a proclamation.
The FHFA said it has validated and approved two new credit-score models that will replace the Classic FICO score Fannie Mae and Freddie Mac have used for nearly two decades. Director Sandra L. Thompson also said the regulator is planning to end upfront fees charged by the government sponsored enterprises on some borrowers and affordable mortgages.
Meanwhile, Ginnie Mae President Alanna McCargo announced plans to increase issuer liquidity by shortening re-pooling seasoning requirements for reperforming loans from six to three months. Ginnie also will give issuers the option of re-pooling these loans into TBA eligible pools.
Both initiatives will take effect no later than by the end of next year’s first quarter, McCargo said.
Though Gordon had no announcements, she told the session a new rule dealing with loan modifications and foreclosures was “in the pipeline” and could be published in the Federal Register any day now. She also warned that “more proposed rules” are in the offing, as the Biden Administration seeks to make housing more affordable and accessible to a wider array of buyers.
But, the FHA Commissioner added, the White House is “not trying to flip policy.” Rather, the goal is to make housing finance more equitable for everyone.
Along those lines, Gordon asked industry stakeholders to participate in the effort. “We need your expertise and input,” she said. “We can’t do what we do if you aren’t doing what you do.”
Gordon also indicated she is sympathetic to industry requests to reduce mortgage insurance premiums, but said any changes will have to wait. “Hopefully, we can do something once we get the fiscal 2023 budget,” she said. “It’s something we are thinking about actively.”
Thompson told the session that implementing the new credit-score models will “bring improved accuracy and a more inclusive approach to evaluating borrowers." But implementing them, she added, will be a multiyear effort “that will take time and require close coordination across the industry.”
Thompson also said the GSEs will work toward changing the requirement that lenders provide credit reports from all three major national credit repositories. Instead, they will be allowed to provide reports from any two of the three bureaus. This, Thompson said, will “reduce costs without compromising accuracy.”
The targeted changes to the enterprises’ guarantee fee include eliminating the upfront guarantee fee for certain borrowers and affordable housing loans, but increasing the charge for most cash-out refinancings.
To a smattering of applause, McCargo also reported that Ginnie Mae is in the midst of a “massive transition” to a fully enabled, cloud-enabled system.
