David Stevens: Calabria may be “the absolute worst person for this job at this time”


Over the last several weeks, the housing industry’s finance sector has lobbied the government to set up a federally-backed liquidity facility for U.S. mortgage servicers to address a substantial increase in forbearance requests from the nation’s financially strained borrowers. HousingWire Digital Producer Alcynna Lloyd sat down with the former head of the Federal Housing Administration and former Mortgage Bankers Association President David Stevens, who now serves as CEO at Mountain Lake Consulting to gauge his thoughts on whether or not the government has done enough to address the issue.

Below you will find two of the six questions Stevens answered with the full audio in a video at the end. This interview has been lightly edited for length and clarity.

Alcynna Lloyd: You have been very outspoken on the forbearance issue and what the Federal Housing Finance Agency and GSEs should be doing. Do you think their recent efforts have been enough to address the industry’s forbearance concerns?

David Stevens: I’m glad they did something, but it’s a little bit late. We already saw significant credit tightening as a result of the FHFA not stepping in. Instead of having servicers be required to advance forbearance payments for the full term of forbearance, they kept it at four months only at which point the GSEs would then take over the advance requirements. The problem is that in that four-month period, we could see an extraordinary amount of liquidity being advanced, and unlike other forbearance programs that have existed prior to the CARES Act, I don’t think we’ll get any repayment back until the borrower ends his or her forbearance plan and begins to repay their advances, which could take months or years. So, there’s still an outrageous amount of liquidity being advanced for servicing that Freddie Mac and Fannie Mae own, and it’s putting a really outrageous amount of liquidity pressure onto the nonbank community.

Alcynna Lloyd:  FHFA Director Mark Calabria recently said that no nonbank is too big to fail and that he expects forbearance requests to remain at low. The industry has said otherwise and data shows that forbearance has already passed Calabria’s projections. Do you think anyone can change Calabria’s mind or philosophy?

David Stevens: Mark is a libertarian. His perspective is that the government should not intervene in housing markets, and he’s been very vocal over the years about the role of FHA and the GSEs being too big. I believe he is exercising his economic philosophy that the markets will improve without intervention. I think his recent comments were blasphemous and they aided in additional tightening of credit. The statements also reflect his lack of experience in the business. He’s never been in the industry; he’s always been an economist. I’ve seen much more aggressive positions taken about his job right now. I think Mark is being naive, and putting the housing finance system at risk. More importantly, this is going to have huge negative pressure on an economy that’s already struggling. The housing system is 40 basis points of the gross domestic product and about a fifth of GDP is housing. This will be a core component of economic recovery, and you want it to be strong as we go back to work. Mark is doing anything but providing that support.

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AIME’s Anthony Casa on the mortgage industry’s most pressing topics


HousingWire CEO Clayton Collins sat down with Association of Independent Mortgage Experts Chairman Anthony Casa to discuss some of the most pressing issues pertaining to the housing industry as the coronavirus that causes COVID-19 continues to create uncertainty within the market.

The pair evaluate the Federal Reserve’s move to drop interest rates, which has created an increased demand for mortgage-back securities, the nation’s recently announced all-time high in jobless claims and United Wholesale Mortgage’s decision to tighten underwriting standards on verifying income and employment as more and more American borrowers face unemployment.

Additionally, Casa addresses Congress’ call of encouragement to the mortgage industry in the hopes of providing forbearance to consumers who are experiencing financial difficulty during this tumultuous time.

According to Casa, when the housing industry looks back on this period of crisis, they will have to consider the impact U.S. political figures had on the market during the pandemic.

Here are the important timestamps during the interview to help you navigate the biggest issues.  

  • 1:54 How the Fed’s rate cut is impacting mortgage lending
  • 5:29 What bank and lending CEOs are hearing about Fed buying habits
  • 7:00 What forbearance entails for both lenders and borrowers
  • 11:00 What mortgage lenders need to be telling consumers
  • 12:08 Will servicers have to make modifications to their loans
  • 15:00 UWM’s decision to tighten loan standards as unemployment climbs
  • 17:20 What happens if a borrower loses their job before their first mortgage payment

Click the video below to watch the full interview.

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MBA’s Bob Broeksmit on what lenders need to know now to conduct business


The Mortgage Bankers Association is working in overdrive right now to serve as a first line of defense for the industry. The coronavirus continues to push lenders into unchartered waters on how to handle not only the influx in demand but the many challenges that are creating massive operational roadblocks for them and borrowers. 

HousingWire CEO Clayton Collins sat down with MBA President and CEO Robert Broeksmit to share what his team is working on to make sure people are as informed as possible and armed with the latest information.

The full interview can be found on the Housing News Podcast, but we recorded a video of the interview as well to give an inside look on our conversations with organizations that are helping move markets forward during this tumultuous time.

Here are the important timestamps during the interview to help you navigate the biggest issues.  

  • 1:43 Broeksmit sets the stage with their focus on borrower relief and the actions the MBA is taking
  • 3:36 Servicer challenges
  • 7:17 Lender operational challenges with warehouse credit 
  • 10:16 Possible relief for margin calls on pipelines and finance MSRs
  • 12:51 How could rates normalize 
  • 16:18 Status of the Remote Online Notarization (RON) federal bill 
  • 18:51 Impact of county recorder offices closing 
  • 21:16 What to expect when it comes to the physical side of real estate 
  • 23:13 Impact of consumer confidence 
  • 24:51 The current MBA forecast

Click the video below to watch the full interview.

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Borrowers rush to refinance as mortgage rates fall to near-record lows


With interest rates nearing all-time lows, borrowers seem to be in quite a hurry to refinance their mortgage.

Case in point: mortgage applications jumped 15.1% from one week prior, according to the Mortgage Bankers Association.

The organization explained this week’s reading includes an adjustment for last week’s Presidents’ Day holiday.

Mike Fratantoni, MBA’s senior vice president and chief economist attributes this week’s spike to the nation’s low-interest-rate environment.

“The 30-year fixed-rate mortgage dropped to its lowest level in more than seven years last week, amidst increasing concerns regarding the economic impact from the spread of the coronavirus, as well as the tremendous financial market volatility,” Fratantoni said. “Refinance demand jumped as a result, with conventional refinance applications increasing more than 30%.”

Given the recent drop in Treasury rates, Fratantoni said the MBA now expects refinance activity to increase until fears subside, and rates stabilize.

According to the organization, the Refinance Index increased 26% this week and was 224% higher than the same week in 2019.

The refinance share of mortgage activity was 66.2% of total applications, rising from 60.8% the previous week, the MBA said.

When it comes to purchasing volume, which slightly declined this week, Fratantoni said the market is likely to reignite as spring approaches.  

“We are now at the start of the spring homebuying season. While purchase applications were down a bit for the week, they are still up about 10% from a year ago, “he said. “The next few weeks are key in whether these low mortgage rates bring in more buyers, or if economic uncertainty causes some home shoppers to temporarily delay their search.”

According to the MBA, the seasonally adjusted Purchase Index fell 3% this week, while the unadjusted purchase index increased 11% from last week and remains 10% higher than a year ago.

Here is a more detailed breakdown of this week’s mortgage application data:

  • The adjustable-rate mortgage share of activity increased to 6.4% of total applications.
  • The Federal Housing Administration share of mortgage apps fell to 9.3% from 10.5% last week.
  • The Department of Veterans Affairs share of applications retreated to 10.5% from 11.8% the previous week.
  • The Department of Agriculture share of total applications inched backward to 0.4% from the prior week’s 0.5%.
  • Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.57% from last week’s 3.73%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) held steady at last week’s 3.72%.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.74% from last week’s 3.84%.
  • The average contract interest rate for 15-year fixed-rate mortgages fell to 3.03% from last week’s 3.18%.
  • The average contract interest rate for 5/1 ARMs dropped to 3.12% from last week’s 3.21%.



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