Presented by the Urban Institute and CoreLogic
Morning Keynote: Reflections on the 2014 Midterm
Elections
Rick Lazio, former US representative (R-NY-2)
Gene Sperling, former director, National Economic Council
Sarah Rosen Wartell, president, Urban Institute
Join The Conversation
#HousingData
Presented by the Urban Institute and CoreLogic
Tumultuous Times in the Housing Market
Data, Demand, and Demographics: A Symposium on Housing Finance
November 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
Summary
• Price growth decelerating but low-end price growth still
high
• Home sales down in 2014 due to higher rates & less cash
distressed sales
• Purchase originations below 2001 levels
• Supply and demand for credit driving market weakness
• Pristine mortgage performance
4
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
Home Price Growth Decelerating….
Percent Change from a Year Ago
20%
Sept 2014
+5.6%
15%
10%
5%
0%
-5%
-10%
-15%
SF Combined
Source: CoreLogic, September 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
SF Combined Excluding Distressed
5
Jul-2015
Jan-2015
Jul-2014
Jan-2014
Jul-2013
Jan-2013
Jul-2012
Jan-2012
Jul-2011
Jan-2011
Jul-2010
Jan-2010
Jul-2009
Jan-2009
Jul-2008
Jan-2008
Jul-2007
Jan-2007
Jul-2006
Jan-2006
Jul-2005
Jan-2005
Jul-2004
Jan-2004
Jul-2003
Jan-2003
Jul-2002
Jan-2002
-20%
Oakland, CA
Warren, MI
Houston, TX
Riverside, CA
Dallas, TX
Los Angeles, CA
Portland, OR
Denver, CO
Seattle, WA
Cambridge, MA
Sacramento, CA
Atlanta, GA
Miami, FL
Fort Worth, TX
San Antonio, TX
San Diego, CA
Anaheim, CA
St. Louis, MO
Chicago, IL
Minneapolis, MN
Charlotte, NC
Orlando, FL
Pittsburgh, PA
New York, NY
Tampa, FL
Washington DC
Phoenix, AZ
Nassau, NY
Newark, NJ
Baltimore, MD
…But Remain Strong in Select Markets
Percent Change from Year Ago
12%
10%
8%
6%
4%
2%
0%
Source: CoreLogic, September 2014.
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
6
Low-End Prices Have Increased Twice as Much as High-End Prices
Percent Change from Year Ago
1400
1200
January 1976 Index = 100
Low Priced Homes
High Priced Homes
1000
800
600
400
200
Jan-76
Oct-77
Jul-79
Apr-81
Jan-83
Oct-84
Jul-86
Apr-88
Jan-90
Oct-91
Jul-93
Apr-95
Jan-97
Oct-98
Jul-00
Apr-02
Jan-04
Oct-05
Jul-07
Apr-09
Jan-11
Oct-12
Jul-14
0
Source: CoreLogic, September 2014.
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
7
Low-End Prices in Appear Frothy in Some Markets
Washington DC
250
Chicago
210
190
190
170
170
150
150
200
130
130
150
110
110
90
90
High Price Index
Jan-00
Mar-01
May-02
Jul-03
Sep-04
Nov-05
Jan-07
Mar-08
May-09
Jul-10
Sep-11
Nov-12
Jan-14
50
70
70
Low Price Index
400
Houston
190
350
170
300
150
High Price Index
50
Los Angeles
250
130
200
110
150
90
100
Low Price Index
High Price Index
50
Jan-00
Mar-01
May-02
Jul-03
Sep-04
Nov-05
Jan-07
Mar-08
May-09
Jul-10
Sep-11
Nov-12
Jan-14
50
Low Price Index
Source and Note: January 2000 Index = 100, CoreLogic, September 2014.
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
High Price Index
Jan-00
Mar-01
May-02
Jul-03
Sep-04
Nov-05
Jan-07
Mar-08
May-09
Jul-10
Sep-11
Nov-12
Jan-14
70
50
Low Price Index
High Price Index
Jan-00
Mar-01
May-02
Jul-03
Sep-04
Nov-05
Jan-07
Mar-08
May-09
Jul-10
Sep-11
Nov-12
Jan-14
Low Price Index
Jan-00
Apr-01
Jul-02
Oct-03
Jan-05
Apr-06
Jul-07
Oct-08
Jan-10
Apr-11
Jul-12
Oct-13
100
210
Denver
250
230
210
190
170
150
130
110
90
70
50
Phoenix
Low Price Index
High Price Index
Jan-00
Mar-01
May-02
Jul-03
Sep-04
Nov-05
Jan-07
Mar-08
May-09
Jul-10
Sep-11
Nov-12
Jan-14
300
8
‘Normal’ Sales Up 10 Percent, Distressed Sales Down
Percent Change from Year Ago
80%
Resales
REO Sales
Short Sales
60%
40%
20%
0%
-20%
-40%
Source: CoreLogic, August 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
Jul-2014
Apr-2014
Jan-2014
Oct-2013
Jul-2013
Apr-2013
Jan-2013
Oct-2012
Jul-2012
Apr-2012
Jan-2012
Oct-2011
Jul-2011
Apr-2011
Jan-2011
Oct-2010
Jul-2010
Apr-2010
Jan-2010
-60%
9
Distressed and Cash Sales Clearing Out
30%
Distressed Sales
50%
25%
Cash Sales
45%
REO Sales Share
Source: CoreLogic, August 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
Jul-13
20%
Jan-12
0%
Jul-10
25%
Jan-09
5%
Jul-07
30%
Jan-06
10%
Jul-04
35%
Jan-03
15%
Jul-01
40%
Jan-00
20%
Jan-00
Mar-01
May-02
Jul-03
Sep-04
Nov-05
Jan-07
Mar-08
May-09
Jul-10
Sep-11
Nov-12
Jan-14
Short Sales Share
10
Cash Sales Dominant in the Affordable South/Midwest
Number of Cash Sales in July 2014
Florida Home Sales
3500
80000
40000
3000
70000
35000
60000
30000
50000
25000
40000
20000
30000
15000
20000
10000
2500
2000
1500
1000
500
0
5000
10000
Mortgaged Sales
Cash Sales - Right Axis
0
Jan-00
Mar-01
May-02
Jul-03
Sep-04
Nov-05
Jan-07
Mar-08
May-09
Jul-10
Sep-11
Nov-12
Jan-14
0
Source: CoreLogic, July 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
11
CoreLogic/HMDA Comparison
1st Lien Residential Mortgage Originations
Percent Change in 1st Lien
Purchase Originations
Number of 1st Lien Purchase Originations
8
20%
7
15%
6
10%
5%
4
3
0%
2
-5%
1
-10%
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014 YTD
Millions
5
HMDA
CoreLogic
Source: Federal Reserve, CoreLogic, August 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
-15%
2009 2010 2011 2012 2013 2014
YTD
HMDA
CoreLogic
12
Purchase Mortgage Originations Below Level in 2001
Percent Change from Year Ago in 1st
Lien Purchase Mortgage Originations
Number of 1st Lien Purchase Mortgage Originations
12 Month Sum
50%
5.5
40%
5.0
30%
4.5
20%
Millions
10%
0%
4.0
3.5
-10%
3.0
-20%
2.5
-30%
Jan-01
Feb-02
Mar-03
Apr-04
May-05
Jun-06
Jul-07
Aug-08
Sep-09
Oct-10
Nov-11
Dec-12
Jan-14
Source: CoreLogic, August 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
Jan-01
Mar-02
May-03
Jul-04
Sep-05
Nov-06
Jan-08
Mar-09
May-10
Jul-11
Sep-12
Nov-13
2.0
-40%
13
Sales Much More Sensitive to Rising
Rates Than During the Past
Spring 1994
2 Mo. Change
in Rates (BPs)
Summer 2003
2 Mo. Change
in Rates (BPs)
Arm Share
30
140
120
Summer 2013
Arm Share
140
120
25
140
24
120
23
25
100
2 Mo. Change
in Rates (BPs)
100
Arm Share
10
9
8
100
7
22
80
80
20
60
40
21
60
40
80
20
60
19
40
6
5
4
3
18
15
20
20
20
2
17
2 Month Change in 30-Year Rate
ARM Share
Source: MBA and Freddie Mac
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
0
1
0
7/26/2013
7/19/2013
7/12/2013
7/5/2013
6/28/2013
6/21/2013
6/14/2013
-20
6/7/2013
2/11/1994
2/18/1994
2/25/1994
3/4/1994
3/11/1994
3/18/1994
3/25/1994
4/1/1994
4/8/1994
4/15/1994
4/22/1994
4/29/1994
5/6/1994
5/13/1994
5/20/1994
2 Month Change in 30-Year Rate
ARM Share
15
-20
7/11/2003
7/18/2003
7/25/2003
8/1/2003
8/8/2003
8/15/2003
8/22/2003
8/29/2003
9/5/2003
9/12/2003
9/19/2003
10
-20
16
5/31/2013
0
5/24/2013
0
2 Month Change in 30-Year Rate
ARM Share
14
Demand Versus Supply for Credit
15
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
Demand for Credit is Weak
1st Lien Purchase Mortgage Applications at Same Level as 20 Years Ago
14
12
Millions
10
8
6
4
2
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
16
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
Demand for Credit is Weak
Real Median Income at Same Level as 17 Years Ago
$58,000
$56,000
$54,000
$52,000
$50,000
$48,000
$46,000
$44,000
$42,000
$40,000
Source: Census
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
17
Demand for Credit is Weak
Borrower Incomes Have Stagnated
100,000
90,000
80,000
70,000
60,000
50,000
Jan-01
Aug-01
Mar-02
Oct-02
May-03
Dec-03
Jul-04
Feb-05
Sep-05
Apr-06
Nov-06
Jun-07
Jan-08
Aug-08
Mar-09
Oct-09
May-10
Dec-10
Jul-11
Feb-12
Sep-12
Apr-13
Nov-13
Jun-14
40,000
Note and Source: Incomes for purchase and refinance originations, CoreLogic, September 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
18
Demand for Credit is Weak
Ratio of Home Prices to Rents
210
190
170
150
130
110
Jan-83
Mar-84
May-85
Jul-86
Sep-87
Nov-88
Jan-90
Mar-91
May-92
Jul-93
Sep-94
Nov-95
Jan-97
Mar-98
May-99
Jul-00
Sep-01
Nov-02
Jan-04
Mar-05
May-06
Jul-07
Sep-08
Nov-09
Jan-11
Mar-12
May-13
Jul-14
90
Source: CoreLogic and BLS, August 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
19
Nevada
Florida
Mississippi
Arizona
Ohio
Georgia
Illinois
Michigan
Rhode Island
Maryland
New Hampshire
Wisconsin
Arkansas
Virginia
Louisiana
New Jersey
Tennessee
New Mexico
Missouri
North Carolina
Delaware
Alabama
South Carolina
Colorado
Connecticut
Idaho
Washington
California
Minnesota
Utah
Kentucky
Nebraska
Massachusetts
Oklahoma
Iowa
Oregon
Kansas
Wyoming
Pennsylvania
Alaska
West Virginia
Indiana
District of Columbia
New York
Hawaii
Montana
Texas
Maine
North Dakota
Demand for Credit is Weak
Percentage of Owners with Less than 10% Equity in Current Home
40%
35%
30%
25%
20%
15%
10%
5%
0%
Source: CoreLogic
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
20
Demand for Credit is Weak
High Reservation Prices: Homeowners Think Their Home is Worth About 15% More Than Prices Are
Between 2007 and 2011 Home Prices Fell By How Much?
0%
-5%
•
In normal times, owners
generally overvalue their homes
by 5%.
•
The crisis led to another 10
percentage point increase in
overvaluation.
-10%
-15%
-20%
-25%
-30%
Homeowner's
Response
Home Price Index
Source: Census
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
21
Demand for Credit is Weak
Average FICO Score for Borrowers That Experienced a Mortgage Default, by Vintage
Source: Foreclosure’s Wake: The Credit Experiences of Individuals Following a Foreclosure, Kenneth Brevoort, Federal Reserve, 2010.
22
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
Demand for Credit is Weak
Boomerang or Frisbee?
Source: FRBNY Consumer Credit Panel/Equifax
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
23
Demand for Credit is Weak
Main Reason for Renting Over Buying
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Not enough savings Don't earn enough Don't want upkeep Credit is not good
or too much debt
income
of ownership
enough
Source: FRBNY Survey of Consumer Expectations, Special Module on Housing, February 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
24
Supply of Credit Weak
Credit Score<620
150
100
LTV>=90
Broker Share
50
0
DTI>=43
Arm Share
Low&No Doc
Share
Normal
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
Year Ago
25
Supply of Credit Weak: Quarter of Market Lacks Access
Distribution of Purchase Origination FICO Scores
70%
60%
50%
40%
30%
20%
10%
0%
Less than 640
Pre-Bubble ('00 to '03)
Source: CoreLogic, June 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
640 to 760
760+
Post QM ('13 to YTD '14)
26
2000 Purchase Credit Box
Purchase Credit Box Visualization
100+ - 105
95+ - 100
90+ - 95
85+ - 90
80+ - 85
75+ - 80
70+ - 75
65+ - 70
60+ - 65
55+ - 60
< 55
<500
520 - 539
560 - 579
600 - 619
640 - 659
680 - 699
720 - 739
760 - 779
800+
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
27
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
28
100+ - 105
95+ - 100
90+ - 95
85+ - 90
80+ - 85
75+ - 80
70+ - 75
65+ - 70
60+ - 65
55+ - 60
< 55
<500
520 - 539
560 - 579
600 - 619
640 - 659
680 - 699
720 - 739
760 - 779
800+
2005 Purchase Credit Box
Purchase Credit Box Visualization
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
100+ - 105
95+ - 100
90+ - 95
85+ - 90
80+ - 85
75+ - 80
70+ - 75
65+ - 70
60+ - 65
55+ - 60
< 55
<500
520 - 539
560 - 579
600 - 619
640 - 659
680 - 699
720 - 739
760 - 779
800+
2010 Purchase Credit Box
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
29
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
100+ - 105
95+ - 100
90+ - 95
85+ - 90
80+ - 85
75+ - 80
70+ - 75
65+ - 70
60+ - 65
55+ - 60
800+
760 - 779
720 - 739
680 - 699
640 - 659
600 - 619
560 - 579
520 - 539
<500
2014 Purchase Credit Box
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
30
Purchase Underwriting is Getting Tighter Not Loosening
Purchase Market DTI and Credit Score Distributions
DTI 75th Percentile
FICO 10th Percentile
44
700
43
680
660
42
640
41
620
40
600
39
580
38
560
37
520
35
500
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
36
Source: CoreLogic, September 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
Jan-98
Mar-99
May-00
Jul-01
Sep-02
Nov-03
Jan-05
Mar-06
May-07
Jul-08
Sep-09
Nov-10
Jan-12
Mar-13
May-14
540
31
Recent Vintages Exhibit Pristine Performance
90+ Day Delinquency Rate For Conventional Conforming 1st Lien Mortgages
2003
18%
16%
2002
2001
20%
18%
16%
2000
14%
1999
20%
2008
2007
2006
18%
2004
16%
10%
10%
10%
8%
8%
8%
6%
6%
6%
4%
4%
4%
2%
2%
2%
0%
0%
0%
3 Months
7 Months
11 Months
15 Months
19 Months
23 Months
27 Months
31 Months
35 Months
39 Months
43 Months
47 Months
51 Months
55 Months
59 Months
12%
3 Months
7 Months
11 Months
15 Months
19 Months
23 Months
27 Months
31 Months
35 Months
39 Months
43 Months
47 Months
51 Months
55 Months
59 Months
12%
Source: CoreLogic, September 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
Months After Origination
2011
2010
14%
12%
Months After Origination
2013
2012
2005
14%
2014
2009
3 Months
7 Months
11 Months
15 Months
19 Months
23 Months
27 Months
31 Months
35 Months
39 Months
43 Months
47 Months
51 Months
55 Months
59 Months
20%
Months After Origination
32
Recent Vintages Best Performing Since 1990s
90+ Day Delinquency 12 Months After Origination
0.8%
3.0%
0.7%
2.5%
0.6%
2.0%
0.5%
0.4%
1.5%
0.3%
1.0%
0.2%
0.5%
0.1%
Source: CoreLogic, September 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
2009
2010
2011
2012
2013
1999
2000
2001
2002
2003
2004
0.0%
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0.0%
33
‘Hedonic Mortgage’ Performance
90+ Delinquency Rate
18%
16%
14%
12%
10%
Mortgage Universe:
Purchase
Owner-Occupied
Conventional
Conforming
30-Year FRM
Credit Score 690 to 710
LTV 75% to 80%
DTI 30% to 35%
8%
6%
4%
2%
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58
Source: CoreLogic, September 2014
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
34
Thank You!
www.corelogic.com/blog/
@CoreLogicEcon
35
©2014 CoreLogic, Inc. All rights reserved. Private & Confidential
Demographic Impacts on Housing and Tenure Decisions
Moderator: Ellen Seidman, senior fellow, Urban Institute
Sarah Gerecke, deputy assistant secretary for housing counseling, US
Department of Housing and Urban Development
Enrique Lopezlira, senior policy advisor, economic policy, National Council
of La Raza
Chris Mayer, Milstein professor of real estate, Columbia Business School
Rolf Pendall, director, Metropolitan Housing and Communities Policy
Center, Urban Institute
Join The Conversation
#HousingData
Presented by the Urban Institute and CoreLogic
Erik Drost, University Circle Apartment Construction / CC BY 2.0 / Flickr.com
Rental housing: Growth
on the near horizon
Perspectives from
demographic analysis
Rolf Pendall
Takeaway: More households, more rentals
Millennial generation—born 1981-95—is a large and diverse group, but they
have delayed household formation and homeownership
Millennials will fuel annual household formation of 900K-1M/ year
from 2010 to 2020—compared to 1.1M/ year from 2000-2010
In our medium scenario, annual net increase of 360,000 homeowner
households and 600,000 renter households from 2010 to 2020
 Comparison with 2000-10: 617,000 and 506,000, respectively
 Economy, credit availability could change these outcomes substantially
Net household formation will drop between 2020 and 2030 (i.e., less than a
decade from now) owing to mortality among Baby Boomers, reducing annual
growth for both homeowners and renters.
Household formation: Very low now; recovery?
Percent of persons who are householders,
1990-2030, three scenarios
55%
White nonHispanic
50%
Black
nonHispanic
45%
Other
nonHispanic
40%
Hispanic
35%
30%
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
Sources: 1990, 2000, 2010 US Census of Population; 2013 American Community Survey; Urban
Institute projections by race and age
2035
Homeownership attainment: Will it recover?
Homeownership by race, 1990-2030, three scenarios
75%
White
nonHispanic
70%
65%
Other
nonHispanic
60%
55%
50%
Hispanic
45%
Black
nonHispanic
40%
35%
30%
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
Sources: 1990, 2000, 2010 US Census of Population; 2013 American Community Survey; Urban
Institute projections by race and age
2035
Total growth of households by tenure over the
decade: Observed + three scenarios
16
14
12
10
8
6
4
2
0
Renters
2010s
Fast
Medium
Slow
Fast
2000s
Medium
1990s
Slow
Observed
Owners
Observed
Millions
Total household growth set to decline from 2000-10;
renters likely to increase markedly
2020s
Sources: 1990, 2000, 2010 US Census of Population; 2013 American Community Survey; Urban
Institute projections by race and age. Slow, median, and fast scenarios assume slow, median, and
fast headship and homeownership transitions respectively.
Office of Housing Counseling
Presented by:
Sarah Gerecke
Deputy Assistant Secretary
U.S. Department of Housing and Urban Development
November 5, 2014
Supporting Responsible and Sustainable
Homeownership
• Office of Housing Counseling
• HUD-Approved Housing Counseling Agencies
– Approximately 2,400 independent nonprofit and
governmental organizations
– 1.5 million consumers counseled in 2013
– Over 12.2 million counseled since 2009
Fiscal Year 2013 Housing Counseling Activity
21%
43%
2%
4%
9%
10%
11%
Mortgage Delinquency Counseling
Pre-Purchase Counseling
Rental Counseling
Home Maintenance and Financial Management Counseling
Reverse Mortgage Counseling
Homeless Counseling
Education Workshops (Group Counseling)
Mortgage Delinquency Counseling
674,472
Pre-Purchase Counseling
176,688
Rental Counseling
158,103
Home Maintenance and Financial Management Counseling
135,137
Reverse Mortgage Counseling
63,525
Homeless Counseling
26,060
Education Workshops (Group Counseling)
Total Clients Served
338,170
1,572,155
Pre-purchase Counseling Starting
to Rebound
46
Financing Rental Housing
Moderator: Clea Benson, housing policy reporter, Bloomberg News
Dave Borsos, vice president, capital markets, National Multifamily Housing
Council
David Brickman, executive vice president, multifamily business, Freddie
Mac
Sean Dobson, chairman, chief executive officer, Amherst Holdings
Shekar Narasimhan, managing partner, Beekman Advisors
Christopher Tawa, manager, multifamily housing policy, Federal Housing
Finance Agency
Join The Conversation
#HousingData
Presented by the Urban Institute and CoreLogic
FINANCING RENTAL HOUSING
Data Demographics and Demand
Dave Borsos, November 5, 2014
MARKET INFLUENCES

SUPPLY CONSTRAINTS

INCOME FLAT

AFFORDABILITY

CAPITAL AVAILABILITY

POLICY UNCERTAINTY
49
SUPPLY CONSTRAINTS
600
15.0
13.0
500
11.0
400
9.0
300
7.0
5.0
200
3.0
100
1.0
0
-1.0
Starts (5+)
Completions (5+)
Vacancy Rate (5+)
Source: US Census Bureau.
50
AFFORDABILITYINCOME FLAT
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Average Household Income Annual Change (Inflation Adjusted)
Rent Annual Change (Inflation-Adjusted)
Source: US Census Bureau, MPF
Research.
AFFORDABILITY- AGING
HOUSING STOCK
Year
Units
Percent
1939 or
Earlier
2,122,790
10.8%
1940 to 1959
1,985,391
10.1%
1960 to 1979
6,121,851
31.1%
1980 to 1999
6,065,960
30.8%
2000 or Later
3,400,739
17.3%
Source: NMHC tabulations of 2013 American Community Survey microdata.
CAPITAL AVAILABILIY
100
90
80
70
60
50
40
30
20
10
0
Equity Financing
Debt Financing
Source: National Multifamily Housing Council. An index value above 50 indicates
improved conditions.
70%
CAPITALMULTIFAMILY MDO
60%
50%
40%
30%
20%
10%
Depositories
Life Cos.
Fannie-Freddie
CMBS
Ginnie
Other
0%
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: Federal Reserve Board.
POLICY UNCERTAINTY
•
LEGISLATIVE- HOUSING REFORM, DODDFRANK, TAX REFORM, FISCAL STIMULUS
•
REGULATORY- FHFA, BASEL III, WATER,
ENERGY, BUILDING CODES
•
LOCAL- NIMBY
•
GLOBAL- EUROPE DODRUMS, JAPANESE
STIMULUS, REGIONAL WARS
55
Luncheon Keynote: Navigating the Turbulent Seas of
Housing Finance: An Investor Perspective
Lewis S. Ranieri, chairman and founding partner, Ranieri Partners
Nick Timiraos, reporter, The Wall Street Journal
Join The Conversation
#HousingData
Presented by the Urban Institute and CoreLogic
Government Sponsored Enterprises (GSEs) Reform:
What can be done without legislation?
Moderator: Faith Schwartz, senior vice president, government solutions,
CoreLogic
Andrew Davidson, president, Andrew Davidson & Co.
Julia Gordon, director of housing finance and policy, Center for American
Progress
Jim Millstein, chairman and chief executive officer, Millstein & Co.
Jim Parrott, senior fellow, Housing Finance Policy Center, Urban Institute
Join The Conversation
#HousingData
Presented by the Urban Institute and CoreLogic
Estimated GSE Capital and Income Requirements
Expenses ($billions)
Assets
Capital
($trillions) ($billions)
Excess
Return
(10%)
Wrap Fee
Operating (paid to
Gov't)
Total
Single Family
Loan Guarantee*
4.7
188
18.8
2.8
5
0.5
2
2.5
4.7
193
19.3
4.8
30.0
Retained Portfolio
1.0
40
4.0
0.2
1.5
5.7
Multi-Family
0.2
8
0.8
0.2
0.3
1.3
Total
5.1
241
24.1
5.2
7.7
37.0
Securitization Services
Subtotal
5.9
*includes $0.8 trillion of mortgage credit risk in the retained portfolios
27.5
Housing Finance Reform Can Be Achieved with Existing Authority
While Allowing for—but Not Depending on—Future Legislative Action
FUNCTION

JOHNSON-CRAPO BILL
Public regulation and
reinsurance
Regulation &
Reinsurance
Fannie Mae
Fees
Fannie
Breakup
Common
Securitization
Platform
Private

Federal Housing Finance
Agency
Reinsurance
Mortgage
Insurance Fund
Public

Regulation
Federal Mortgage
Insurance Corporation
— Prudential
requirements
— Market liquidity
— Wide availability of
30-year mortgage
ADMINISTRATIVE REFORM
Private single-family
— underwriting,
aggregation and MBS
insurance
New SingleFamily Private
Aggregators and
MBS Insurers
Spin-Off Fannie
Multi-Family
Business
Private multifamily


Spin-Off Fannie
Single-Family
Aggregator and
MBS Insurer
Spin-Off Fannie
Multi-Family
Business
Spin-Off Freddie
Multi-Family
Business
Challenges



Treasury Preferred Stock
Purchase Agreements
Fees
Freddie
Breakup
Common
Securitization
Platform
New Small Bank Co-Op
Single- Family Aggregator and
MBS Insurer
(pieces of Fannie and Freddie)
New MultiFamily
Businesses
Freddie Mac
Passing legislation
Developing underwriting expertise at the FMIC
Capitalizing new aggregators and MBS
insurers
Developing new operating systems and
relationships from scratch
Providing small and community bank lenders
with equal access to the secondary market
New SingleFamily Private
Aggregators and
MBS Insurers
New MultiFamily
Businesses
Spin-Off Freddie
Single-Family
Aggregator and
MBS Insurer
Spin-Off Freddie
Multi-Family
Business
Features





Can be accomplished with authority already
granted to FHFA and Treasury by HERA
Government-backed reinsurance provided by
the GSEs which remain in conservatorship
Legacy GSE debt and MBS holders still
protected by Treasury backstop
Privatized single-family and multifamily
businesses are adequately capitalized
FHFA through GSEs facilitate competition
with single security, adverse capital
requirements and common securitization
platform
Single-family Financing
Moderator: Laurie Goodman, director, Housing Finance Policy Center, Urban
Institute
Ed DeMarco, senior fellow in residence, Milken Institute Center for
Financial Markets
Bill Emerson, chief executive officer, Quicken Loans
Michael Fratantoni, chief economist and senior vice president, research
and industry technology, Mortgage Bankers Association
Rohit Gupta, president and chief executive officer, Genworth Mortgage
Insurance
Mark Hanson, senior vice president, securitization, Freddie Mac
Join The Conversation
#HousingData
Presented by the Urban Institute and CoreLogic
Presented by the Urban Institute and CoreLogic