DS News - U.S. Bank

44 THE FUTURE OF GINNIE MAE Ginnie Mae has published an update to its "Ginnie Mae 2020" white paper, previously released in 2018. Apart from a detailed progress report on what it planned to accomplish by next year, the update also gave some proposals on housing finance reform. e report noted that under the Presidential Memorandum signed in March 2019, Ginnie Mae and other federal stakeholders "have been directed to propose reforms for the U.S. housing finance system." Ginnie Mae said that this directive meant that the agency would modernize its operations and technology and also propose administrative and legislative changes, "that enhance our program requirements and our standards, ensuring safety and soundness." Additionally, the report indicated that the reform plan could also include "further policy consideration not presented in this update." Looking at the progress that the agency had made towards the goals enumerated in its white paper, the update indicated that Ginnie Mae's mortgage-backed securities (MBS) platform remained robust and secure. While modernization would remain a top priority, Ginnie Mae said that its state-of- the-art platform could already scale without market disruption or operational incidents "as demonstrated in the period since the 2008 financial crisis, when the total MBS outstanding grew from less than $500 billion to over $2.1 trillion today." "At $2.1 trillion in size and growing, the Ginnie Mae MBS portfolio is an integral component of the U.S. mortgage finance system," said Maren Kasper, Acting President, Ginnie Mae. "Ginnie Mae continues to demonstrate its capacity to effectively operate and maintain a state-of- the-art technology platform and counterparty risk framework, keeping pace with innovation and evolution in the mortgage finance system." e agency said that the update included its efforts to continue to improve operations, enhance the user experience, and move towards adopting digital mortgages against the modernization benchmarks presented in its white paper last year. Additionally, Ginnie Mae said that it continued to evolve its counterparty risk management program and to maintain a strong focus on program innovation. "is allows us to fulfill our mission by facilitating liquidity in the American housing market, ensuring the health of the Ginnie Mae security and protecting taxpayer interests," Kasper said. "e report details the progress we have made in the last year and outlines our blueprint for the future." HUD'S CARSON: CUT THE RED TAPE Dr. Benjamin Carson, Secretary of the De- partment of Housing and Urban Development (HUD), called for incentives to eliminate red tape that could lead to more affordable housing, according to a report by Fox News. "Our country is facing serious housing affordability challenges," Carson said in a state- ment. "Too many families can't afford a home mortgage, and too many Americans face high rent prices…We must do more to increase supply and bring down housing costs by reducing state and local regulations and zoning restrictions." Some of the possible reasons for elevated home prices cited included zoning, rent control, permitting, and environmental regulations. Carson, speaking recently at a conference, used California as an example, where monthly housing costs for a family of four in the San Francisco area averages $3,121, according to a USA Today study. "To exacerbate the problem, last year, California mandated that all new homes must have solar panels, which will further drive up the price of a new house," Carson said at the conference. e report adds that Carson has talked to mayors of both parties who agree there is a need to roll back local land use and building rules, which would make it easier to build new and renovate housing units. "Regulations such as density limitations, height restrictions, parking requirements, lengthy permitting and approval processes, and 'not in my backyard'…opposition are the pri- mary reasons for housing supply restrictions and increased housing costs," Carson said during his speech in Washington, D.C. "HUD is working with local public officials, business leaders, and community leaders to mobilize support for smart but significant deregulation at the local level." e National Association of Home Builders (NAHB) has reported that increasing regulatory costs account for 25% of the price of a single- family home and 30% of a multifamily develop- ment. "Removing regulatory barriers that con- tribute to the increased costs of housing will pave the way to homeownership," said NAHB Chairman Greg Ugalde, a builder and developer from Torrington, Connecticut. "Home builders and the residential construction community are committed to working with Congress to ensure homeownership is within reach of hard-working families." was the total percent of homes "underwater" in Q1 2019. Source: CoreLogic, "The Role of Housing in the Longest Economic Expansion." STAT INSIGHT 4.1%

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