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Remarks by HUD Secretary Ben Carson to the Mortgage Bankers Association

April 4th, 2019 Comments off

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Flashing back to 2016, among the former GOP contenders to announce their support for Donald J. Trump to become the 45th president was Ben Carson, M.D.

 

Flash-forward to the present.  Now HUD Secretary Carson has been an earnest and dependable supporter of President Trump and his agenda. While he has floated the notion that he may step aside at HUD after the 2020 race, there has never been any serious flap at HUD about the security of his tenure there.

Carson has stated his support for manufactured housing numerous times.  Part of that, on a practical level, must include financing options.  That is one of several topics addressed in his comments, below.

It is useful to see what Carson says to audiences other than manufactured home professionals.  Links to other reports that deal with Carson’s comments to senators or others are further below.  But let’s see what his prepared comments were yesterday to the powerful Mortgage Bankers Association (MBA), in Washington yesterday.

 

Remarks by Secretary Ben Carson
Mortgage Bankers Association National Advocacy Conference
Washington, D.C., Capital Hilton, April 2, 2019

 

As prepared for delivery. The speaker may add or subtract comments during his presentation. Provided by HUD to MHProNews.

Thank you, Bob, for those kind words. And thank you to the talented MBA staff for organizing this important conference, as well as to the many leaders, professionals, and pioneers in our industry here today.

To the more than 325 million men and women who call our country home, housing is not just a pillar of our nation’s economy – it is the foundation on which families, and their futures, are often built.

There are signs that this future looks as bright – or perhaps brighter – than ever before. Under President Trump’s leadership, America has witnessed historic highs in employment, job creation, and economic growth.

A recent Gallup poll reported that 69 percent of Americans expect to be better off this time next year than they are today. This financial optimism is not only a 16-year high, it’s within two percentage points of an all-time record.

But every doctor knows that a patient can look like a paragon of health, while latent and localized conditions go untreated underneath. If any part of the body is allowed to languish, every part of the body will eventually feel its pain. Our vital organs are all in it together.

So too it is with America. We are only the Land of Opportunity when opportunity is available to all. And HUD is tasked with a special mission to carry our nation’s new gains to the local doorsteps of vulnerable communities who need help most.

At HUD, our aim is to ensure every American has access to decent, safe, and affordable housing. Both HUD and the MBA share a common understanding: that improving access to capital is a critical driver of economic opportunity.

Today, I’d like to share some of HUD’s initiatives to increase access to financing across the housing industry, the many successes we’ve already begun to see, and how we are embracing responsible reform in the months ahead.

 

Opportunity Zones

One program expected to greatly increase access to capital while expanding affordable housing is the Opportunity Zones initiative.  

Created by the 2017 Tax Cuts and Jobs Act, Opportunity Zones are designed to stimulate economic development and job creation by incentivizing long-term capital investments in low-income neighborhoods. These Zones are structured to serve local communities for the long-term. Only investors who commit capital for five, seven, and ten years receive rewards. That means new growth becomes consistent growth and new jobs become steady jobs. 

When new businesses are “here today, gone tomorrow,” residents face an uncertain future. But when they know new businesses are “here today, here to stay,” residents can plan for the long-term future of their neighborhoods, including by applying for mortgage loans and becoming homeowners.

And Opportunity Zones are not a small, incremental initiative – they represent massive action to encourage financial capital to be invested in distressed communities.  

For perspective, the National Council of State Housing Agencies announced last month that its Opportunity Zone Fund Directory had expanded to nearly $24 billion dollars in anticipated investments. Of those $24 billion dollars, 91 percent of the funds are planning to invest in multifamily residential, student housing, mixed-use, hospitality, or other commercial development.

We have already heard positive reports from city officials that anticipated investments in Opportunity Zones have helped preserve and attract economic development into their localities. And these are still just the early days. The Department of Treasury estimates Opportunity Zones will attract more than $100 billion dollars in private investment. 

To ensure Opportunity Zones reach their potential, President Trump established the White House Opportunity and Revitalization Council, which I have the privilege to chair. The Revitalization Council consists of members across 13 agencies and will prioritize Opportunity Zones in a variety of federal efforts, including deregulation, grant funding, loan guarantees, infrastructure spending, and crime prevention.

By utilizing a single body to achieve interagency consensus – rather than having 13 separate departmental processes – the Revitalization Council can achieve faster resolution, and that means we can deliver much faster solutions.

 

LITHC Expansion

HUD is also adding positive incentives for the construction and sale of affordable homes by expanding HUD’s Low-Income Housing Tax Credit Pilot for multifamily home development.

This expanded initiative will streamline the processing of FHA insurance applications for projects with equity from the LIHTC program. It’s part of our commitment to further align our policies and underwriting towards supporting affordable housing production and preservation.

Because New Construction and Substantial Rehabilitation currently make up more than 40 percent of our total volume, we expect the expansion of our LIHTC Pilot to significantly increase HUD’s affordable housing volume.

More homes also create more home mortgages, which can contribute to the health of the market.

 

HUD Accomplishments in Preserving and Developing Affordable Housing

HUD is also working to increase the supply of affordable multifamily housing through a multitude of initiatives that support the critical infrastructure on which the mortgage market is based.

To spur local community reinvestment, we have partnered with local authorities and private businesses to preserve more than 100,000 public housing units. This public-private partnership, the Rental Assistance Demonstration, or RAD, program has generated close to $6 billion dollars in construction investment and created more than 100,000 jobs.

To advance economic opportunity, the Federal Housing Administration has served more than 650,000 homebuyers in 2018 alone, most of whom were low-to-moderate income earners. FHA has also supported the production and preservation of more than 120,000 multifamily housing units and provided $2.45 billion dollars in insurance for hospitals and residential care facilities.

And, to help communities recover from natural disasters, HUD has awarded nearly $28 billion dollars since last April through the Community Development Block Grant-Disaster Recovery Program to repair seriously damaged housing, businesses, and infrastructure. These grants represent the largest single amount of disaster recovery assistance in HUD’s history.  

 

Responsible Reform

In housing financing reform, HUD is supporting the Trump Administration’s efforts to reduce taxpayer risks, expand the private sector’s role, modernize government housing programs, and make sustainable home ownership for American families our benchmark of success.

 

The White House has set forth the following goals for housing finance reform:

• Ending the conservatorships of the GSEs upon the completion of certain specified reforms;

• Facilitating competition in the housing finance market;

• Establishing regulation of the GSEs that safeguards their safety and soundness, while minimizing the risks they pose to the nation’s financial stability; and

• Ensuring the Federal Government is properly compensated for any support it provides to the GSEs or the secondary housing finance market.

 

The White House has called for HUD’s Reform Plan to include several objectives, including:

• Addressing the financial viability of the Home Equity Conversion Mortgage program; 

• Assessing the risks and benefits associated with providing assistance to first-time homebuyers;

• Defining the appropriate role of the FHA in multifamily mortgage finance;

• Diversifying FHA lenders through increased participation by registered depository institutions;

• Enhancing GNMA program participation requirements and standards to ensure its safety and soundness; and

• Reducing abusive and unsound loan origination or servicing practices for loans in the GNMA program.

 

HUD is also promoting fiscal responsibility in the real estate finance market by ending irresponsible government obligations, while enabling a pathway for responsible citizens to become homeowners.

One such example was our decision to discontinue the FHA’s insurance of mortgages on homes that carried PACE liens. Through the PACE program, homeowners could obtain financing to make improvements to their homes to increase the home’s energy efficiency.

But FHA insurance not only put taxpayers at risk by allowing PACE liens to be placed ahead of the mortgage itself in the event of a default, it strongly threatened secured lenders by eroding the underlying mortgage collateral.

Further, PACE assessments were far less comprehensive than traditional mortgage financing products, and therefore lacked the same level of consumer protections. The FHA’s involvement with accepting properties with PACE assessments may have even indirectly helped to overshadow potential consumer abuses.

HUD appreciates that our decision to promote fiscal responsibility in this case was met with positive support by the MBA. Given the substantial risk that PACE loans represented to the FHA’s Mutual Mortgage Insurance Fund, I’m also reminded of an early lesson from medicine: “To treat a sick patient, the doctor has to stay healthy, too.”

 

Conclusion

While HUD is leading the fight to ensure decent, safe, and affordable housing for all Americans, we are grateful for the continued feedback and thought leadership on housing policy offered by institutions such as the MBA.

Solving affordable housing challenges requires a team effort. It’s been said that, “the bigger the dream, the more important the team” – and few ambitions are more compelling, or necessary, than that of the American Dream.

HUD looks forward to continuing to work alongside the industry participants here today, so our common vision is a lived reality for all who call this great nation home.

Thank you, and I look forward to your questions.

 

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See related reports, further below the byline and notices. That’s this evening’s “News through the lens of manufactured homes, and factory-built housing.” © ## (News, analysis, and commentary.)

 

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President Obama and Julian Castro tout lower FHA premium

January 9th, 2015 Comments off

julian-castro-housing-urban-development-hud-secretary-posted-daily-business-news-mhpronews-com-In a move designed to bring more first-time homebuyers into the housing market, President Barack Obama said Wednesday the Federal Housing Administration (FHA) will lower its annual insurance premiums from 1.35 percent to 0.85 percent.

CNBC tells MHProNews that for the typical FHA applicant, the reduction in premiums means a savings of about $80 on their monthly payment, according to CoreLogic’s chief economist, Sam Khater.

A manufactured home lender that does FHA loans told MHProNews  off the record that this will be good for the industry.

Many people feel that this lower insurance premium, along with FHA’s 96.5 percent Loan-to-Value (LTV) lending, will make those mortgages more competitive with the GSE loans. Chris Freemott, an executive at Midwest Equity Mortgage in Oak Brook, Illinois, said, “If you want to call it a tennis match between Fannie and the FHA, they just returned Fannie’s serve.”

In a news release from HUD, Secretary Julián Castro said, “This action will make home ownership more affordable for more than two million Americans in the next three years. By bringing our premiums down, we’re helping folks lift themselves up so they can open new doors of opportunity and strengthen their financial futures.”

Mortgage bankers praised the decision. “It couldn’t come at a better time,” said David Stevens, CEO of the Mortgage Bankers Association. “February is the beginning of the spring market. I think it will have a definitive impact, particularly in the first-time homebuyer market.”

The reduction will likely come under scrutiny by some on Capitol Hill, as the FHA is still building its capital reserves and is not yet above the mandatory 2 percent minimum. It is back in the black, after having bled cash for two years.

McClatchy News reported that POTUS Obama used a speech in Arizona to address push back from conservative Republicans, who argued that lowering mortgage insurance premiums would leave taxpayers on the hook if the housing sector should go belly up again.

These rates are for responsible buyers. We’re not going down the road again of financing folks buying things they can’t afford,” Obama said. “We’re going to be cracking down on that. We put in place tough rules on Wall Street, and we created a Consumer Financial Protection Bureau, and we’re really policing irresponsible lenders luring folks into buying stuff they can’t afford.” ##

Related story, linked here.

(Julian Castro photo credit: HUD)

sandra-lane-daily-business-news-mhpronews-com-75x75-Article Submitted by Sandra Lane to – Daily Business News- MHProNews.

MBA’s Lobbying seeks to ease CFPB’s Mortgage Regulations

October 10th, 2014 Comments off

Dave Stevens-president-and-CEO-of-the-Mortgage-Bankers-Association-MBAAs midterms elections approach, the Mortgage Banker Association (MBA) is seizing the lobbying opportunity to fund Congressional campaigns; hoping to open more discussions to gain relief from the Consumer Financial Protection Bureau (CFPB) regulations currently in place in the U.S..

National Mortgage News told MHProNews that Dave Stevens, president and CEO of the Mortgage Bankers Association (MBA), explained he’s unsure of the results the association’s efforts will receive because of the presidential election is also approaching, which has its own agenda.

Because we’re heading into a presidential election, the longer we go into 2015, presidential politics dwarfs much of the debate,” Stevens stated. “I question how productive the upcoming year will be post-election.

Nevertheless, the MBA is pressing ahead and requesting changes in the strict regulations on loans and mortgages that were implemented following the 2007-2008 financial crisis.

According to the Center for Responsive Politics, the MBA is on its way to setting a new record in fundraising, with contributions of more than $950,000 going to Congressional campaigns.

open-secrets-credit-national-mortgage-news-posted-daily-business-news-mhpronews-com

 

The MBA’s lobbyists explain their motivation is to allow more people to buy homes and be able to afford mortgage payments. A change in the regulations will clearly benefit the housing market, and thus the broader economy.

Speaking about the Dodd-Frank Act, the MBA recognizes the good intentions of such regulations. However, Stevens and other members point out different consequences. While the act aimed at protecting customers, it turned out they often suffer from these current legislations because of high fees and the too many documents required to prove their ability to repay a loan.

Steven’s point, in the minds of many MH pros, is particularly true in the manufactured housing market.

The uncertainty of regulations offers the Manufactured Home (MH) market the space to attract consumers who in some cases cannot currently access conventional mortgages with bigger down payments on site built homes, as industry leaders like UMH’s Sam Landy have pointed out.

Should the MBA succeed in having Congress make the changes, could offer MH investors, lobbyists and other professionals other opportunities to attract new customers seeking homeownership. ##

(David Stevens photo credit : MBA.org, chart credit Open Secrets and National Mortgage News)

(Daily Business News article submitted by Lucine Colignon)

Mortgage Applications Dip for week Ending Sept. 26

October 2nd, 2014 Comments off

mortgage app  housingwire creditThe Mortgage Bankers Association (MBA) reports for the week ending Sept. 26, mortgage applications slipped 0.2 percent on a seasonally adjusted basis from the previous week, while on an unadjusted basis the Market Composite Index (MCI) decreased 0.4 percent. The Refinance Index fell 0.3 percent from the week prior, while the seasonally adjusted Purchase Index was unchanged. According to theworldpropertychannel.com, the unadjusted Purchase Index fell one percent from the previous week, but was 11 percent lower than one year earlier. Refinance mortgage activity remained at 56 percent of total apps from one week prior, while the average interest rate for 30-year fixed rate mortgages (FRM) with conforming loan balances (less than $417,000) fell to 4.3 percent from 4.39 percent the previous week, as MHProNews has learned. ##

(Image credit: housingwire.com)

Apprehensive Lenders, Changing Homebuyer Demographics Create Challenges

September 15th, 2014 Comments off

mortgage app   texaslendingtoday creditExperts at the American Mortgage Conference say the combination of lenders apprehensive about making mistakes on loan apps and the qualified mortgage rule, and the need for low-cost financing to meet the changing demographics of minority and women home buyers whose income is not apt to rise, are two major challenges facing the housing industry. David Stevens, president and CEO of Mortgage Bankers Association (MBA), says originations this year are expected to fall 45 percent over 2013 due to a decline in refinance activity, resulting in the housing market having its slowest level of purchase activity since 1995. “If we don’t figure this out, you can go ahead and shut down your mortgage offices,” Stevens told attendees. “We have to have a national dialogue with proposed solutions. [Lenders and Washington policymakers] need to move beyond issues with distrust.”

Carol Galante, the outgoing Federal Housing Administration (FHA) commissioner, says, “The FHA has got to think about affordability” of its products. “We need to responsibly improve access,” according to nationalmortgagenews.com. Complicating the FHA’s position is its need to have a two percent capital ratio, which keeps its insurance premiums high, as MHProNews reported here Sept. 12, 2014, which leads to many consumers doing business with Fannie Mae and Freddie Mac instead. Galante suggested the FHA could encourage lease-to-own arrangements. “There is an idea of testing a vehicle that would let people use FHA loans and structured agreements to allow [renters] to assume an FHA loan after renting for some time,” she says. “As we go into this new world, helping people transition into homeownership … is going to be really important.” ##

(Image credit: texaslendingtoday.com)

New Home Mortgage Applications Fall in August

September 11th, 2014 Comments off

mortgage  moneycontrol credit glasses calc paperData from the Mortgage Bankers Association (MBA) reveals mortgage applications to buy a new home fell nine percent in August, according to nationalmortgagenews.com. New single-family home sales fell 2.1 percent from the July rate of 433,000 units, on a seasonally adjusted annual rate (SAAR), to 424,000 in August, while the average loan size for a new home increased one percent July to August, to $300,453. Conventional loans comprised the lion’s share of the mortgage apps at 68.9 percent, while Federal Housing Administration (FHA) accounted for 15.7 percent, and Veterans Affairs loans made up 14.3 percent. As MHProNews reported Aug. 21, 2014, existing home sales rose in July 2.4 percent over the previous month to a SAAR of 5.15 million. New home sales estimates are extracted from a survey that tracks application volume from a nationwide builders network. ##

(Image credit: moneycontrol.com)

MBA’s David Stevens: Home Ownership Financing must Change

September 8th, 2014 Comments off

mortgage  housingwire creditNoting the current housing market scenario is not meeting expectations most analysts predicted a year ago, Mortgage Bankers Association (MBA) CEO and President David Stevens says the changing demographic in the U. S. is going to require changes in the home financing market. “If you look at existing housing stock in this country, 70 percent of it is occupied by white non-Hispanics,” Stevens said. “If you look over the next decade, in terms of new housing stock being created and new household formation, only about a third of that is going to be white non-Hispanic, and the remainder is going to be minority. We’re moving to a country that is going to be majority minority. But in terms of home sales, it is going to be vastly majority minority by about two-thirds.”

According to nationalmortgageprofessional.com, he says multi-generational households with members working different, sometimes multiple, jobs, and offshore sources of funds will result in financing new types of homeownership. This demographic change may favor the affordable housing market, which could benefit  manufactured housing. Stevens says the percentage of 30 year-olds with mortgage debt is down ten percent, which MHProNews understands is considered a significant dent in housing recovery. ##

(Editor’s Note: An exclusive by David Stevens to MHProNews is found, linked here.)

(Image credit: housingwire.com)

MBA Reports Credit Availability Index Rises

August 5th, 2014 Comments off

mortgage app  housingwire creditMortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI) reports mortgage credit increased 0.5 percent from 115.8 in June to 116.4 in July, 2014, according to worldpropertychannel.com. Benchmarked at 100 in March 2012, an index increase indicates credit is loosening while a drop in the index notes tightening of credit. A rise in the number of jumbo Adjustable Rate Mortgage (ARM) programs spurred the MCAI’s rise, as MHProNews has learned, as did an increase in the availability of Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loan programs. ##

(Image credit: housingwire.com)

Rural Housing Service Automating Loans

April 9th, 2014 Comments off

In an attempt to streamline services of the U. S. Rural Housing Service (RHS), administrator Tony Hernandez says the agency is automating the loan approval process and lenders are willing to pay $50 for each loan to cover the cost, reducing the RHS need to seek financial support from Congress. “They will pay a fee so it is easier for them to close more loans, and get more people into homeownership,” Hernandez told a House appropriations subcommittee April 4, according to nationalmortgagenews.com. The approval is done manually, often using back and forth faxing, since the government shutdown disabled the automated system, resulting in many lenders and real estate agents shunning the United States Department of Agriculture program because of the long turnaround time, opting for FHA instead.

MHProNews.com has learned the National Association of Realtors (NAR) and the Mortgage Bankers Association (MBA) support the modernization effort. Last year RHS lenders originated 163,000 federally guaranteed mortgages valued at $22.4 billion, up from $19.2 billion in 2012. ##

(Image credit: texaslendingtoday.com)

Mortgage Servicers Rankled by CFPB’s Accusations

March 12th, 2014 Comments off

Deputy Director of the Consumer Financial Protection Bureau (CFPB), Steven Antonakes, speaking at the Mortgage Bankers Association’s (MBA) Servicing Conference, pointedly blamed the servicers for the many foreclosures outstanding and the home owners still underwater on their mortgages. According to nationalmortgagenews.com he said, “This kind of continued sloppiness is difficult to comprehend and not acceptable. It is time for the paper chase to end.” Despite his harsh words, other CFPB personnel at the conference were more interested in working with servicers in the future than laying blame for the past. However, CFPB program manager for mortgage servicing, Allison Brown, noted a high number of consumer complaints concerning mortgage servicing, especially those with an approved loan modification in place. As MHProNews.com understands the bottom line: The CFPB wants to work with servicers, but the close scrutiny will continue, so servicers need to refine their compliance management. ##

(Image credit: mortgageloanrealtor.com)