Steve OConnor

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Steve OConnor
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Steve OConnor

• Mortgage Bankers Association

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David Crowe
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David A. Crowe, PhD.
Senior Staff Vice President,Regulatory and
Housing Policy National Association of Home
Builders
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Builders Build to

• Expand the inventory of homes to meet the
  population growth
• Satisfy consumers at the lowest possible cost

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Annual Increase in Population
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Long Term Demand and Supply
Source Census Bureau, NAHB Forecast
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New Homes Started / Shipped
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Vacant Year-Round Housing Units on the Market
(000s, 3-Quarter Moving Average)
(Percent)
of Housing Stock (right scale)
No. of Units (left scale)
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Buyers of Newly Built Homes

• Whole households move from one home to a new one
• Were owners
• Were renters
• Households form as part of purchase
• Were not in country
• Kids left home or school
• Roommates parted

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Newly Built Home Purchasers
Previously abroad 0
New households 5
Previously in group quarters 3
Kids leave home 1
Previously owners 61
Previously renters 30 (20 first time buyers)
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Existing Home Purchasers
Previously abroad 1
New households 6
Previously in group quarters 3
Kids leave home 2
Previously owners 46
Previously renters 42 (29 first time buyers)
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What Helps Get Homes Built?

• Healthy economy
• Predictable and affordable material and labor
  supply
• Well-planned land inventory and infrastructure
• Reasonable regulatory environment
• Stable mortgage market with lowest possible
  interest rates and steady production credit

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Roy DeLoach
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Roy DeLoach

• National Association of Mortgage Brokers

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Who is a Broker?

• Mortgage Brokers originate about 50 of all home
  loans
• Another 30 - 35 are originated by banks and
  lenders acting as if they are mortgage brokers
• Most residential mortgages are quickly sold into
  the secondary market

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Who Holds the Risk?

• Most banks, lenders and mortgage brokers have
  contract provisions with investors / lenders
  requiring buy-back of a loan for early payment
  default
• The GSEs have contract provisions that reduce
  buy-back requirements for lenders provided the
  loan was accepted by their AUS

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Who Does What?

• Wall Street, Hedge Funds, Freddie Mac, Fannie Mae
• Lenders and Underwriters
• Point of Sale Originators - Most lenders, small
  banks, credit unions, mortgage brokers,
  homebuilders, real estate brokers

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Who is Regulated?
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The Two World Order

• Watters v. Wachovia
• Split the mortgage world into two camps
• Federal-chartered mortgage provider
• State-chartered mortgage provider
• New business models being developed
• Exploit removal of state law consumer protections
  for Federal entities

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What is the Phone Number?
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What is the Phone Number?
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Safeguards Going Forward

• Pre-payments should match the first adjustment
  period?
• Escrow Accounts For sub-prime required for
  loans above 80 LTV?
• Stated income / No Document use a credit score
  tool to permit?
• Ability to Repay use a credit score tool?

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Consumer Protections

• National Registry of all Originators
• Fees for all Enforcement and Education
• Mortgage originators must have something to lose

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Consumer Protections

• Trigger Lists
• This practice should be limited to written offers
  only
• Disclosures
• Mortgage originators role?
• Do you intend to sell my loan?
• Does your firm or bank offer all types of
  loans?Sub-prime or just conventional loans?

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