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Weekly update from the National Housing Conference
News from Washington
FHFA seeks input on risks posed by climate change and natural disasters

Citing “a growing body of research” examining the risks posed by climate change and natural disasters to the economy and the U.S. housing market, FHFA issued a Request for Input (RFI) on how to best identify and assess future risk, and enhance supervision.

“Natural disasters can adversely affect the regulated entities. Historically, the ability to assess the scale, timing, location, and impact of such risks has been limited. Today's RFI will help FHFA better understand and address the regulated entities' exposure to climate and natural disaster risk," said FHFA Director Calabria. ​

According to the latest research, the number of affordable housing units at risk of coastal flooding and sea level rise is expected to triple by 2050. The affordable housing stock in New Jersey, New York and Massachusetts is particularly vulnerable. To mitigate future risks, FHFA has solicited feedback on more than two dozen questions, including how to define climate and natural disaster risk, what risks to prioritize, alternative risk mitigation strategies and how to best support minority and low-income households. Responses are due by April 19.
FHFA and HUD extend foreclosure moratoria

This week, both the Federal Housing Finance Agency (FHFA) and the Department of Housing and Urban Development (HUD) extended moratoria in place to prevent foreclosures and evictions of households experiencing financial hardship as a result of COVID-19. Mortgagee Letter 2021-03 extends the Federal Housing Administration’s (FHA) moratorium on foreclosures of single-family mortgages through March 31. The moratorium was previously set to expire on Feb. 28. “Immediately safeguarding borrowers with HUD-insured or guaranteed mortgages is an important first step in tackling larger, systemic housing challenges that must be overcome,” said Acting Federal Housing Commissioner Janet Golrick.

FHFA similarly extended its moratorium on single-family foreclosures and evictions of residents of real estate owned properties from its previous expiration of Jan. 31 through Feb. 28. “To keep our communities safe, and families in their homes during the COVID-19 pandemic, FHFA is extending Fannie Mae and Freddie Mac's foreclosure and eviction moratorium," said FHFA Director Mark Calabria.
HUD adopts substantive updates to manufactured housing standards

HUD published its final rule amending the Federal Manufactured Home Construction and Safety Standards, also known as the HUD Code. The final rule incorporates many of the recommendations put forward by the Manufactured Housing Consensus Committee – an advisory committee comprised of manufactured housing producers, public officials and other stakeholders.

The amendments, which take effect on March 15, include eliminating approval requirements for certain alternative construction features, carbon monoxide alarm requirements, updates to allow for “optimal use of manufactured housing in urban areas,” new provisions for garages and carports, and new design requirements for attached manufactured homes.
According to HUD, the changes “are designed to eliminate outdated regulatory barriers that have been an impediment to expanding the availability of this affordable housing type while protecting the safety of manufactured housing.”
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White House taps FTC member, student loan ombudsman to head CFPB

This week, the Biden administration announced its intent to nominate Rohit Chopra to serve as the next director of the Consumer Financial Protection Bureau (CFPB). Chopra currently serves as a member of the Federal Trade Commission and was the CFPB’s student loan ombudsman under the Obama administration when the agency was first created. Several organizations and members of Congress have applauded the president’s selection, including U.S. PIRG, the Center for Responsible Lending, Sen. Elizabeth Warren (D-Mass.) and Sen. Sherrod Brown (D-Ohio).

Shortly after President Joe Biden’s inauguration, former CFPB Director Kathleen Kraninger announced her resignation from the role. Kraninger’s resignation should help to expedite Chopra’s confirmation. Dave Uejio, who has been at the CFPB for nearly a decade, will serve as acting director until Chopra is confirmed.
CFPB report spotlights the challenges servicers are facing during the pandemic

The CFPB published a special edition of its Supervisory Highlights that summarizes supervisory findings and consumer issues during the pandemic. COVID-19 “deeply impacted consumers,” the report explains. “With large income losses, many households struggled to meet their credit obligations. In the early days of the pandemic, consumer requests for accommodations skyrocketed.”

Mortgage servicers similarly “faced a number of significant challenges,” the CFPB found. As they worked to quickly enroll consumers in forbearance programs, servicers reported operational and resource limitations and general service disruptions, forcing many organizations to reallocate staff from other areas of the business to manage forbearance requests.

In this turbulent environment, the CFPB reports some servicers’ actions may have resulted in risk to consumers. CFPB examiners found instances of servicers providing incomplete or inaccurate forbearance information to consumers, failing to process forbearance requests on time, and enrolling borrowers in automatic or unwanted forbearances. Examiners observed additional loss mitigation process deficiencies; “the risks to consumers from these issues include missed opportunities to pursue and enroll in appropriate repayment options or plans.”
DACA recipients officially eligible for FHA mortgages

HUD issued a waiver affirming Deferred Action for Childhood Arrivals (DACA) program recipients’ eligibility to apply for FHA mortgages, recognizing that these individuals are “legally permitted to work in the U.S.” and therefore “eligible to apply for mortgages backed by the FHA.”

FHA INFO #21-04, which became effective immediately on Jan. 19, waives the FHA Single Family Housing Handbook provision that stipulates that non-U.S. citizens without lawful U.S. residency are not eligible for FHA-insured mortgages. “To avoid confusion and provide needed clarity to HUD’s lending partners, FHA is waiving the [applicable section] in its entirety,” HUD explained. “In a subsequent update to the FHA Handbook the language will be removed.”

Incoming Chairman of the Senate Banking Committee Sherrod Brown (D-Ohio) said the recent waiver “confirmed what we all know should have been true all along – that DACA recipients are fully eligible for FHA loans.”
Chart of the week
Chart of the week: Unemployed renters are heavily reliant on federal assistance

New research from Zillow tracks the impact of federal unemployment assistance on reducing unemployed renters’ housing cost burden. According to Zillow, “This rollercoaster ride is a clear demonstration of just how much of a difference even modest amounts of federal assistance can mean to struggling renters.”
What we're reading
More than 60% of working-age renter households cannot afford a basic standard of living, Harvard’s Joint Center for Housing Studies finds in a new paper titled, “The rent eats first: rental housing unaffordability in the US.” Roughly one in four renter households surveyed in the study spent more than half their income on rent alone. Harvard examined potential policy interventions, including universal affordable housing, healthcare subsidies and reduced food costs, but found that policy approaches that combine housing and transportation affordability would be the most effective in reducing cost burden.

A new study from the National Bureau of Economic Research examines the use of government-backed and private forbearance programs during COVID-19. Forecasting the current forbearance rate, the study suggests that more than 60 million households will miss an estimated $70 billion in mortgage payments by the end of the first quarter. “Debt relief reached its intended target, since forbearance rates are higher in regions with the highest COVID-19 infection rates and the greatest local economic deterioration,” the study concludes. The researchers underscore the central role forbearance continues to play in supporting distressed homeowners.

In a new post for Harvard’s Joint Center for Housing Studies’ blog Housing Perspectives, former Freddie Mac CEO Don Layton analyzes the recent amendments to the GSEs’ Preferred Stock Purchase Agreements and their policy implications. Layton notes that “Treasury is still not fully engaged in preparing to end the conservatorships” and that FHFA Director Calabria’s push for a near-term exit from conservatorship, “well before full GSE capitalization, is dead.”
The week ahead
Monday, January 25

Tuesday, January 26

Wednesday, January 27
AHTCC: 2021 annual meeting, 2 – 5:30 p.m. ET

Thursday, January 28

Friday, January 29
The National Housing Conference has been defending the American Home since 1931. We believe everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.
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