Issue link: http://dsnews.uberflip.com/i/1513140
December 2023 » thefivestar.com 31 December 2023 C O V E R S T O R Y Organizations with the agility to evolve according to homeowners' needs will be positioned for growth in a more challenging environment. Servicers are already feeling pressure to ramp up their support for homeowners as more household budgets are squeezed. Some are beginning to step up their default operations now to prepare, while those who did this proactively in 2023 are already in a better position to handle potential delinquencies. This has been a priority for my team. We have also been expanding our proactive efforts to help homeowners keep up with their mortgage payments. For example, we have coupled continuous monitoring of escrow activity with timely engagement to soften the im- pact of year-over-year changes in escrow activity. We are going the extra mile to help homeowners understand why, how, and when their mortgage payments may increase due to higher tax or insurance expenses. Our goal is to give them ample time to prepare before a payment change takes effect. More broadly, this higher level of support and partnership can help homeowners keep their mortgages healthy throughout the loan term. Jake Williamson, SVP, Single-Family–Head of Collateral Risk Management, Fannie Mae: The housing market is strong for homeowners who locked in low mortgage rates and have more equity in their homes due to rising home prices. Yet, homebuyers, especially consumers looking to buy their first home or those of modest means, are burdened by high home prices, limited supply, and high mortgage rates. According to Fannie Mae's November Home Purchase Sentiment Index ® , a survey-record 85% of consumers indicated that it's a "Bad Time" to buy a home, with most respondents citing high home prices and high mortgage rates as the primary reasons. By comparison, only 37% believe it's a "Bad Time to Sell a Home." With housing supply still at historically low levels, particularly the inventory of existing homes for sale, overall housing activity will likely remain relatively subdued for the foreseeable future. Despite this challenging econom- ic backdrop, we remain committed to working with lenders to support renters and homeowners and advance equity within the housing and mortgage markets. This includes driving the efforts outlined in our Equitable Housing Finance Plan; bringing to market HomeView ® and HomeView en Español, our free-of-charge online homeownership education course to help consumers confidently navigate the mortgage and homebuying process; developing innovative enhancements to Desktop Underwriter ® , such as positive rent payment history and cashflow under- writing; advancing valuation moderniza- tion efforts; and reducing appraisal bias to create a more inclusive mortgage credit evaluation process. Q: With the factors of high rates, high prices, and limited inventory working against today's prospective buyers, which of these factors will be the first to break or bend to provide relief to the marketplace? Greg Austin, EVP, Mortgage Lending, Carrington Mortgage Services: This is a three-way "chicken or the egg" dilemma. There is no indication that home prices will fall enough to have any material difference on the market. As long as rates remain high, buyers will be stagnant, especially those that hold a 2.75% to 3.5% current mortgage, hence listings will remain low. The only thing that can open the market up will be a meaningful reduction in interest rates. Once rates come back down, activity will certainly pick up. Bolton: High interest rates and stubborn inflation will remain a challenge for consumers in 2024. It is not only keeping the housing market extremely tight, but locking people into very high rents, massive credit card debt, and an inability to maintain or build reserves. I think the Fed is showing more of an inclination to slow down increasing interest rates. That is a good indication rates will stabilize or come done slightly in 2024, providing some relief to consumers. This is a three- way 'chicken or the egg' dilemma. There is no indication that home prices will fall enough to have any material difference on the market." —Greg Austin, EVP, Mortgage Lending, Carrington Mortgage Services