Fannie Mae: ‘Things are looking up for housing’

Americans' attitudes about the housing market are strengthening, according to Fannie Mae's May 2015 National Housing Survey, a survey of about 1,000 consumers on their views about homeownership. The survey results echo recent forecasts that predict a pickup in housing activity for the year.

In the latest survey, more consumers reported an increase in household income, nearing an all-time survey high. The growth in wages falls in line with the recent positive jobs reports that show an increase in average hourly earnings. The percentage of consumers surveyed by Fannie Mae who say their household income is "significantly higher" than 12 months ago grew six percentage points to 28 percent over the past two months.

"As job growth appears to be driving meaningful income growth, the outlook for housing market growth also is improving," according to Fannie Mae's report.

The share of consumers who say it's a good time to sell a home continues to rise, also reaching an all-time survey high in May at 49 percent of respondents – six percentage points higher year-to-year. In addition, the number of consumers who would prefer to buy rather than rent on their next move rose three percentage points in May to 66 percent.

"Things are looking up for housing," says Doug Duncan, senior vice president and chief economist at Fannie Mae, noting the survey high for those who say it's a good time to sell, as well as the growing percentage of consumers who say their household income is significantly higher than last year.

"We have found that these two indicators – good time to sell and income growth – are key drivers for the performance of the housing market," Duncan says. "The increase in these indicators suggests our forecast of moderate improvement in the housing market in 2015 is on course and mirrors the near-term performance of other leading market data, including mortgage applications and pending home sales."

The survey also found:

• Consumers say they believe home prices will rise by 2.8 percent, on average, in the next 12 months.
• The number of respondents who believe mortgage rates will go up in the next 12 months dropped to 47 percent.
• Consumers say they believe rental prices will rise about 4.3 percent in the next 12 months.
• The percentage of respondents who believe it would be easy to get a home mortgage fell by 2 percentage points to 50 percent, while those who think it would be difficult remained at 46 percent.

Source: Fannie Mae
Repost courtesy of and © Copyright 2015 INFORMATION, INC. Bethesda, MD. Original post here: http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=4&id=324273

Fannie Mae Sweetens Offer to Avoid Foreclosure

Fannie sweetens offer to avoid foreclosure
WASHINGTON – April 26, 2010 – Struggling borrowers who give up their homes through a "deed in lieu of foreclosure" or a short sale will be able to obtain a new Fannie Mae loan in two years. Currently, these owners must wait at least four years.

The new policy, which takes effect in July, is designed to make foreclosure alternatives more attractive. The policy applies only to Fannie Mae's willingness to approve a mortgage, however. Homeowners' credit scores will still take a hit following a short sale or deed in lieu of foreclosure.

To qualify for a mortgage after the two year wait, Fannie Mae says borrowers must make a 20 percent downpayment; but those who lost a job or have other extenuating circumstances will be able to make a 10 percent downpayment.

Freddie Mac – which, with Fannie Mae, insures over half the mortgages in the U.S. – currently makes homeowners wait four years after a short sale or deed in lieu of foreclosure before it will back a new mortgage. Owners who go through a foreclosure wait five years. For both Fannie Mae and Freddie Mac, the waits can be shorter in some cases if borrowers show extenuating circumstances.

Source: Wall Street Journal (04/26/10) P. A2; Timiraos, Nick © Copyright 2010 INFORMATION, INC. Bethesda, MD

What the Government Takeover of Fannie Mae & Freddie Mac Means to the Housing Industry

What the Government Takeover of Fannie Mae and Freddie Mac Means to Housing Industry
Reprinted from the National Association of Realtors

In short-term, home sales should improve as mortgage rates fall

Washington, D.C. (September 8, 2008)-The federal government's takeover of secondary mortgage giants Fannie Mae and Freddie Mac should cause a drop in mortgage rates in the short term that benefits home buyers, but the long-term outlook is too early to call. NAR fully supports the action of the U.S. Treasury and the Federal Housing Finance Agency.

The federal government had no choice. The capital situation of the two companies was not enough to handle the fallout from rising mortgage defaults in the near future. In addition, investors who purchase Fannie Mae and Freddie Mac debt have lost confidence in the two.

In a statement, NAR commended the Treasury's action, announced yesterday, to bring stability and continued liquidity to the mortgage market.

"The plan will help restore confidence in the secondary mortgage market," said NAR President Richard F. Gaylord.

"We appreciate the steps taken to calm the market, make mortgages more widely available and protect taxpayers. We look forward to working with the administration and Congress to ensure the continued vibrancy of the secondary mortgage market.

Summary of what the Treasury actually did and what it means

• In the takeover, Treasury placed the GSEs into a conservatorship-similar to a Chapter 11 bankruptcy- which fully protects taxpayers from conflicts of interest between taxpayers and shareholders or current management.


• The federal government is authorized to take up to an 80 percent stake in the companies, will review their financial condition quarterly, and inject money into the operations as needed. That means the market for GSE securities will be treated more like Treasury obligations, which should push mortgage interest rates down. That in turn, is expected to speed up home sales and help stabilize home prices.


• The GSEs will be allowed to increase their mortgage funding over the next year and a half to help stabilize markets. Starting in 2010, the plan calls for them to reduce their portfolios.


• The heads of Fannie Mae and Freddie Mac have been relieved of their duties. Treasury selected Herbert Allison, former Merrill Lynch vice chairman, to lead Fannie Mae, and David Moffett, former U.S. Bancorp CFO, to guide Freddie Mac.

Talking Points

• NAR, as the leading advocate for homeownership and housing issues, has closely monitored the market turmoil affecting the stock and debts of the two government-sponsored enterprises (GSEs) - Fannie Mae and Freddie Mac. Their mission is crucial to the economy to make fair and affordable mortgages available to home owners and home buyers. That mission must not be interrupted.
  
• Fannie Mae and Freddie Mac play a vital role in the U.S. economy by making fair and affordable mortgage loans available for home buyers and owners. That must not be interrupted. Treasury Secretary Henry M. Paulson Jr. and James B.Lockhart III, director of the Federal Housing Finance Agency that regulates Fannie Mae and Freddie Mac, have issued strong statements assuring the public that credit will continue to flow over the next 12 to 18 months.


• Short term, the takeover will result in government money driving down interest rates, which is expected to spur an increase in home sales.


• Long term, the action will lead to a major reorganization of the two GSEs as privately owned models. The brunt of that work will fall to the new administration and new Congress. NAR will help shape that process and the association is already working on a plan to do that.


• The action taking by Treasury and the FHFA, which regulates GSEs, makes clear the government will not let the deteriorating conditions of the GSEs disrupt the flow of capital to the housing sector, or harm the national and international financial system.


• The GSEs guarantee more than 40 percent of the nation's mortgages and own or guarantee more than $5 trillion in mortgages. Since the credit crunch began in August 2007, the private sector mortgage securitization market has virtually disappeared and the market share of the GSEs has jumped to about 70 percent.


• NAR will continue to follow events closely and develop recommendations on the future of the GSEs' mission to ensure there will be a robust secondary mortgage market in all markets.