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Market Estimation Model for the 2012 - 2014 Enterprise Single-Family Housing Goals: Final Rule
Author: Jay Schultz In establishing benchmarks for the 2012 and 2014 single-family mortgage housing goals for Fannie Mae and Freddie Mac (the Enterprises), the Federal Housing Finance Agency (FHFA) is required to measure the size of the mortgage market. This paper documents the methodology used to...
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Review of Options Available for Underwater Borrowers and Principal Forgiveness
In considering the use of principal forgiveness by Fannie Mae and Freddie Mac (the Enterprises), it is important to place this particular loss mitigation tool in the context of: the Enterprises’ overall loss mitigation efforts; costs and benefits of using principal forgiveness, including the...
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Appendix to FHFA Review of Options
In January 2012, FHFA released the analyses the agency had conducted since December 2010 on the feasibility and benefit of principal forgiveness as a loan modification tool. This paper presents the agency’s most recent work, which considers subsidy payments2 the Department of the Treasury would...
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Working Paper 12-2: Countercyclical Capital Regime – A Proposed Design and Empirical Evaluation
Motivated by the Great Recession in 2008, countercyclical capital regimes are now being considered by financial regulators. This paper provides a methodology on structuring a countercyclical capital requirement to achieve the goal of determining, at the time of acquisition, an amount of capital...
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Working Paper 12-1: Home Price Indexes for Homes in Different Price Tiers – Biases and Corrections
Under the repeat-transactions framework for constructing house price indexes, the paper analyzes the technical challenges associated with producing unbiased price indexes for homes in distinct price tiers. The basic problem is that the “tier” to which a given home truly belongs is unobservable and...
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Updated Assumptions Used to Estimate Single-Family Mortgages Originated and Outstanding, 1990 – 2011 Q2
Author: Forrest Pafenberg, Senior Policy Analyst Except where noted, all assumptions used to generate estimates of single-family mortgages originated and outstanding are as described in the paper, Single-Family Mortgages Originated and Outstanding: 1990 – 2004.
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Discussion Paper: Alternative Mortgage Servicing Compensation
The purpose of this Discussion Paper is to propose and seek comments on two new mortgage servicing compensation structures. On January 18, 2011, FHFA announced a Joint Initiative to consider alternatives for a new mortgage servicing compensation structure. FHFA directed Fannie Mae and Freddie Mac...
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Housing and Mortgage Markets in 2010
The paper was prepared by Andrew Leventis, Valerie Smith, Jesse Weiher, and Ken Lam of the Office of Policy Development and Research under the supervision of Austin Kelly and Robert S. Seiler, Jr. Peter Alex, Joshua Foster, Hanna Nguyen, and Alison Wardle provided research assistance. This Federal...
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Working Paper 11-2: Characteristics of “High Conforming Jumbo Mortgages” and Implications for the Impact of Reductions in the Conforming Loan Limits for Fannie Mae and Freddie Mac
The maximum loan amounts for mortgages eligible for purchase by Fannie Mae and Freddie Mac (“the Enterprises”), after being temporarily increased in 2008, are scheduled to be reduced in 204 locations in 27 states and the District of Columbia as of October 1, 2011. This paper describes the...
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Working Paper 11-1: The HAMP NPV Model – Development and Early Performance
The foreclosure crisis that began in 2008 triggered the need for new approaches to treat distressed mortgages. A key component of the Obama Administration’s Home Affordable Modification Program (HAMP) was the development of a standardized Net Present Value (NPV) model to identify troubled loans...