Human services programs can benefit from 90 percent federal funding for information technology investments that are complete by the end of 2015 and that: 1) build a service that helps both Medicaid and human services; or 2) build an interface that helps Medicaid use human services records to verify eligibility or "fast track" enrollment. Once the Affordable Care Act is fully phased in, Medicaid will be the country's most widely-used need-based program. Human services programs can use Medicaid records to streamline eligibility determination, despite limits on information sharing and differences between Medicaid and human services program rules, including household definitions.
The Federal Housing Finance Agency has proposed a thoughtful path to creating a single security for Fannie Mae and Freddie Mac, using the Common Securitization infrastructure, in its August Request for Input. While the proposal would benefit from a more definitive time frame, its many strong provisions make it likely to succeed and benefit taxpayers, borrowers and lenders. A key strength of the proposal is the structural provisions – which ensure that the securities backed by both entities will trade equivalently, ending the costly subsidies Freddie has been forced to pay to stay competitive. Ultimately, moving toward this single security should make the market more responsive to borrower and lender needs, boost competition, increase the availability of mortgage credit and potentially help pave the way for GSE reform.
This commentary discusses the impact of the federal government's Home Affordable Refinance Program (HARP) on mortgage loan default rates between April 2009 and November 2011. We analyze a unique borrower-level data set from Freddie Mac and conclude that HARP more than halved the default rate, a material and significant improvement.
The mortgage insurance industry plays an important role in the housing finance system, providing insurance against default by borrowers with low down payment loans. The industry struggled during the housing bust, and while it has done much to shore up its financial health in the subsequent recovery, more needs to be done to strengthen and stabilize the industry if it is to play the central role in the housing finance system that many envision for it.
The Private Mortgage Insurance Eligibility Requirements, recently put forth by Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency, are intended to do precisely that. A thoughtful effort, these standards should succeed in ensuring that private mortgage insurers are strong counterparties to the government-sponsored enterprises and a much improved bulwark against excessive risk in the system.
Several features of the rules as currently written, however, would likely unnecessarily increase costs and cyclicality in the mortgage and housing markets. With a few modest changes, these flaws can be remedied without sacrificing the considerable benefits of the new standards.
Lesbian, Gay, Bisexual, Transgender, or Questioning (LGBTQ) youth are over-represented among the homeless youth population. Researchers and practitioners are working to improve data on homeless youth, especially LGBTQ youth, across the country. This brief summarizes the findings on LGBTQ homeless youth counted during the 2013 YouthCount!, a federal interagency initiative that aims to improve counts of unaccompanied homeless youth. The brief also shares best practices on how to improve counts of LGBTQ homeless youth, and areas where policymakers can act to improve LGBTQ youth outcomes.
The August edition of At A Glance, our reference guide for mortgage and housing market data, includes a special quarterly feature of Fannie Mae and Freddie Mac loan composition, default rates, and repurchase activity.
In August 2008, the GSEs went into conservatorship, and the clear intent was that they were never going to re-emerge; a new system, with a larger role for private capital providers was to take its place. Nearly six years later, GSE reform remains a dream: the government essentially guarantees 80% of new mortgage debt, and credit availability is limited. In this paper, we take a look at the current system, evaluate the proposals for GSE reform, and offer some thoughts on what is being done and what more can be done without a legislative solution.
This commentary examines the potential impact of increasing the guarantee fees that Fannie Mae and Freddie Mac charge lenders. We identify the three most important assumptions made in determining the fees, conclude that transparency regarding these assumptions is critical, and that, under any reasonable set of assumptions, the fees should not be increased for the least risky loans. We also conclude that the GSEs' mission should be taken into account in determining the appropriate capital requirement.
Following the crisis, nonbank specialty servicers rapidly expanded their portfolios of distressed loans. This has contributed to a significant market change: in 2011, the 10 largest mortgage servicers were all banks; by 2013, only five of the top 10 were banks, and the other five were nonbank servicers. The rapid growth and lack of a federal regulator have contributed to significant, heated regulatory scrutiny. This commentary discusses major concerns raised about the largest nonbank servicers, focusing on the three fastest-growing large nonbank servicers. We explore the regulatory and market framework driving their striking growth, then address the major charges against them, in an effort to elevate the debate and inform sound policy.
What role can policymakers play in helping families rebuild their balance sheets after the Great Recession and in helping young families, families of color, and those with less education who were falling behind even prior to it? This brief, based on a convening of nearly 25 national wealth-building experts, presents the facts and identifies four promising policy reforms: (1) providing universal children’s savings accounts; (2) reforming the mortgage interest deduction to better target incentives; (3) expanding access to retirement accounts and automatic enrollment; and (4) promoting emergency savings while addressing barriers such as asset tests in safety net programs.