November 2014

1

A MONTHLY CHARTBOOK

HOUSING FINANCE POLICY CENTER

HOUSING FINANCE AT A GLANCE

ABOUT THE CHARTBOOK

The Housing Finance Policy Center’s (HFPC) mission is to produce analyses and ideas that promote sound public policy, efficient markets, and access to economic opportunity in the area of housing finance. At A Glance, a monthly chartbook and data source for policymakers, academics, journalists, and others interested in the government’s role in mortgage markets, is at the heart of this mission.

We welcome feedback from our readers on how we can make At A Glance a more useful publication. Please email any comments or questions to ataglance@urban.org.

HOUSING FINANCE POLICY CENTER STAFF

Laurie Goodman Center Director Ellen Seidman Senior Fellow Jim Parrott Senior Fellow Sheryl Pardo Associate Director of Communications Jun Zhu Senior Financial Methodologist Wei Li Senior Research Associate Bing Bai Research Associate I Taz George Research Assistant Maia Woluchem Research Assistant Alison Rincon Special Assistant to the Director

INTRODUCTION State of the credit box

With a sweeping midterm election victory for the GOP, the path to legislative GSE reform got considerably narrower. Thus, the focus for reform turns to the FHFA and FHA, where we expect significant movement in the coming months. Over the past six months, the FHFA has asked for input on a variety of issues, and we have commented on them all: guarantee fees and loan level pricing adjustments, Private Mortgage Insurance Eligibility requirements (PMIERs), the single security, and affordable housing goals.

The FHFA has made a concerted effort to open the credit box, strengthening the provision by which lenders are relieved from much of their put-back risk and raising the maximum loan-to-value ratio for some GSE loans from 95 to 97. Both will help expand access without unduly increasing GSE risk. FHFA Director Mel Watt has indicated in recent speeches that work is underway to further clarify reps and warrants, with more guidance on the sunset provision, an independent resolution process for put-back disputes, and remedies short of a put-back for lesser mistakes.

As our new credit availability index indicates, these actions to open the credit box are very important. Our index shows that post-crisis loans have half the credit risk of loans made in the 2000-2003 period. The GSE channel is particularly tight, with about a third of the risk of the 2000-2003 period. This is corroborated by the data in our special feature, which shows that only 8.3 percent of recent Fannie loans (page 34) and 7.4 percent of recent Freddie loans (page 36) have FICOs under 700, compared to 35-37 percent in 1999-2004.

On the FHA side, there have also been initiatives to open the credit box, as outlined in the Blueprint for Access program. Since then, the FHA has released the initial critical draft chapters of their guidebook and a draft of the taxonomy of defects. Many hope to see lower mortgage insurance premiums to broaden access and lessen the risk of adverse selection as better credit flees to the less costly GSEs. Given that their actuary now projects that the FHA’s Mutual Mortgage Insurance Fund will not reach the statutory reserve requirements until 2016, however, such a move is far from certain.

Risk Sharing Developments

The GSEs continue to broaden their risk sharing activities, now turning to front-end risk sharing deals. Prior to this month, they had focused exclusively, and with much

success, on laying off risk already on their books, known as back-end risk sharing. Fannie has laid off risk on 7.5 percent of their book of business and Freddie on 11.9 percent of theirs (page 21), both far exceeding the requirements of the Conservatorship Scorecard. The GSEs started including mortgages over 80 LTV in these transactions in May.

This month saw a very meaningful step in bringing private capital back into the mortgage market: the first front-end risk sharing deal, JPMorgan’s Madison Avenue Securities 2014-1 (page 21). JP Morgan warehoused loans made by JP Morgan Chase bank, then sold them in bulk into a newly issued Fannie Mae MBS, presumably for a very meaningful reduction in guarantee fees. JP Morgan retained the first 4.75 percent subordinated interest, and a 26.88 bps servicing strip that absorbs losses before the subordinated interest. The risk on the 4.75 percent subordinated interest was sold in the capital markets in the form of credit linked notes. Redwood Trust is also reported to be contemplating a front-end risk sharing transaction.

Front-end risk sharing bears important similarities to the private capital/catastrophic insurance structure contemplated by many GSE reform proposals. It is thus an administrative opportunity to experiment deliberately with a truly reduced government footprint in the conventional mortgage market.

INSIDE THIS ISSUE

• Securitization of re-performing and non-performing loans has taken off, accounting for the bulk of new non-agency securitization (page 10)

• GSEs, MBA expect refi rate to continue its decline; housing starts and home sales to pick up in 2015 (page 12)

• Less than 5 percent of loans are seriously delinquent or in foreclosure, lowest since Q2 2008 (page 18)

• GSE portfolio wind-downs have met goals, and are beginning to slow (page 19)

• Over 7.2 million modifications and 7.3 million liquidations since 2007 Q3, according to Hope Now (page 28)

• QE3 has ended and the rate of Fed absorption of agency issuance has fallen considerably (page 31)

• New private mortgage insurance activity grew by $10 billion over previous quarter (page 32)

CONTENTS Overview

Market Size Overview Value of the US Residential Housing Market 6 Size of the US Residential Mortgage Market 6 Private Label Securities 7 Agency Mortgage-Backed Securities 7

Origination Volume and Composition

First Lien Origination Volume & Share 8

Mortgage Origination Product Type Composition (All Originations & Purchase Originations Only) 9

Securitization Volume and Composition Agency/Non-Agency Share of Residential MBS Issuance 10 Non-Agency MBS Issuance 10 Non-Agency Securitization 2.0 10

Agency Activity: Volumes and Purchase/Refi Composition Agency Gross Issuance 11 Percent Refi at Issuance 11

State of the Market

Mortgage Origination Projections Total Originations and Refinance Shares 12 Housing Starts and Home Sales 12

Originator Profitability Originator Profitability and Unmeasured Costs (OPUC) 13

Credit Availability for Purchase Loans

Borrower FICO Score at Origination Month 14 Combined LTV at Origination Month 14 Origination FICO and LTV by MSA 15

Housing Affordability National Housing Affordability Over Time 16 Affordability Adjusted for MSA-Level DTI 16

Home Price Indices National Year-Over-Year HPI Growth 17 Changes in CoreLogic HPI for Top MSAs 17

Negative Equity & Serious Delinquency Negative Equity Share 18 Loans in Serious Delinquency 18

GSEs under Conservatorship

GSE Portfolio Wind-Down Fannie Mae Mortgage-Related Investment Portfolio 19 Freddie Mac Mortgage-Related Investment Portfolio 19

CONTENTS Effective Guarantee Fees & GSE Risk-Sharing Transactions

Effective Guarantee Fees 20 Fannie Mae Upfront Loan-Level Price Adjustment 20 GSE Risk-Sharing Transactions 21

Serious Delinquency Rates Serious Delinquency Rates – Fannie Mae & Freddie Mac 22 Serious Delinquency Rates – Single-Family Loans & Multifamily GSE Loans 23

Refinance Activity Total HARP Refinance Volume 24 HARP Refinances 24

GSE Loans: Potential Refinances Loans Meeting HARP Pay History Requirements 25

Modification Activity

HAMP Activity New HAMP Modifications 26 Cumulative HAMP Modifications 26

Modification by Type of Action and Bearer of Risk Changes in Loan Terms for Modifications 27 Type of Modification Action by Investor and Product Type 27

Modifications and Liquidations Loan Modifications and Liquidations (By Year & Cumulative) 28

Modification Redefault Rates by Bearer of the Risk Redefault Rate after Modification (12 Months & 24 Months) 29

Agency Issuance

Agency Gross and Net Issuance Agency Gross Issuance 30 Agency Net Issuance 30

Agency Gross Issuance & Fed Purchases Monthly Gross Issuance 31 Fed Absorption of Agency Gross Issuance 31

Mortgage Insurance Activity MI Activity & Market Share 32 FHA MI Premiums for Typical Purchase Loan 33 Initial Monthly Payment Comparison: FHA vs. PMI 33

Special Feature: Loan Level GSE Credit Data

Quarterly Feature: Loan Level Credit Data from the GSEs Fannie Mae Balance & Default Rate 34-35 Freddie Mac Balance & Default Rate 36-37 Fannie Mae & Freddie Mac Cumulative Default Rate by Vintage Year 38 Fannie Mae & Freddie Mac Cumulative Repurchase Rate by Vintage Year 39

Related HFPC Work

Publications and Events 40-41

6

MARKET SIZE OVERVIEW Fed Flow of Funds data from 2014 Q2 indicate a small increase in the total value of the US residential 1-4 unit housing market to $21.3 trillion from $20.6 trillion the previous quarter. Household equity, which surged to $11.4 trillion from just under $6.6 trillion in 2011, drove this increase. Meanwhile, with credit standards tight and an elevated cash sales share, mortgage debt has gradually declined since 2007 and now stands at $9.86 trillion, a decrease of $39 billion from the previous quarter. Agency MBS make up 56.5 percent of the total mortgage market, private-label securities make up 7.5 percent, and unsecuritized first liens at the GSEs, commercial banks, savings institutions, and credit unions make up 29.0 percent. Second liens comprise the remaining 7.0 percent of the total.

OVERVIEW

Debt, household mortgages,

$9,833

9.9

11.4

21.3

0

5

10

15

20

25

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Q2

($ trillions)

Value of the US Housing Market

Debt, household mortgages Household equity Total value

Sources: Federal Reserve Flow of Funds and Urban Institute.

5.6

2.9

0.7

0

1

2

3

4

5

6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Q2

($ trillions)

Size of the US Residential Mortgage Market Agency MBS Unsecuritized first liens Private Label Securities Second Liens

Sources: Federal Reserve Flow of Funds, Inside Mortgage Finance, Fannie Mae, Freddie Mac, eMBS and Urban Institute. Note: Unsecuritized first liens includes loans held by commercial banks, GSEs, savings institutions, and credit unions.

7

MARKET SIZE OVERVIEW OVERVIEW

As of September 2014, debt in the private-label securitization market totaled $729 billion and was split among prime (19.8 percent), Alt-A (44.0 percent), and subprime (36.2 percent) loans. In October 2014, outstanding securities in the agency market totaled $5.62 trillion and were 46.5 percent Fannie Mae, 27.3 percent Freddie Mac, and 26.2 percent Ginnie Mae.

0.32 0.26

0.14

0

0.2

0.4

0.6

0.8

1

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

($ trillions)

Private-Label Securities by Product Type Alt-A Subprime Prime

Sources: CoreLogic and Urban Institute. September2014

$2.61

$1.53 $1.47

$5.62

0

1

2

3

4

5

6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

($ trillions)

Fannie Mae Freddie Mac Ginnie Mae Total

Agency Mortgage-Backed Securities

Sources: eMBS and Urban Institute. October 2014

8

OVERVIEW

ORIGINATION VOLUME AND COMPOSITION

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Q1-2

Sources: Inside Mortgage Finance and Urban Institute.

$0.26 $0.12

$0.003

$0.14

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Q1-2

($ trillions)

First Lien Origination Volume and Share

GSE securitization FHA/VA securitization PLS securitization Bank portfolio

First lien originations in the first half of 2014 began far below their 2013 pace, totaling only $513 billion. The share of bank portfolio and FHA/VA originations rose to 26 percent and 22 percent each, while the GSE share dropped to 50 percent from 61 percent in 2013, reflecting the curtailment of refinancing activity. The private label origination share remains less than one percent.

9

MORTGAGE ORIGINATION PRODUCT

TYPE Adjustable-rate mortgages (ARMs) accounted for as much as 29 percent of all new originations during the peak of the recent housing bubble in 2005 (top chart). They fell to a historic low of 1 percent in 2009, and slowly grew to 6.3 percent of total originations in August 2014, 35 percent higher than one year earlier. Fifteen-year FRMs, predominantly a refinance product, comprise 15 percent of new originations. If we exclude refinances (bottom chart), the share of 30-year FRMs in August 2014 stood at 85.7 percent, 15-year FRMs at 6.3 percent, and ARMs at 6.7 percent.

OVERVIEW

MORTGAGE ORIGINATION PRODUCT TYPE

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

All Originations Fixed-rate 30-year mortgage Fixed-rate 15-year mortgage Adjustable-rate mortgage Other

Sources: CoreLogic Prime Servicing and Urban Institute.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Purchase Loans Only

Fixed-rate 30-year mortgage Fixed-rate 15-year mortgage Adjustable-rate mortgage Other

Sources: CoreLogic Prime Servicing and Urban Institute. August 2014

August 2014

10

SECURITIZATION VOLUME AND COMPOSITION

OVERVIEW

1.5

18

$0

$1

$2

$3

$4

$5

$6

Fe

b-1

2

Ap

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2

Jun

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Au

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Oct

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3

Fe

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4

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4

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4

Oct

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($ billions)

Sources: Inside Mortgage Finance and Urban Institute. Note: Monthly figures equal total non-agency MBS issuance minus Re-REMIC issuance.

Non-Agency Securitization 2.0

Agency share 97%

Non-Agency share

3% 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

YT

D

Agency/Non-Agency Share of Residential MBS Issuance

Non-agency single-family MBS issuance has hovered at or below 3 percent of total issuance since early 2011, and this share is even lower if re-REMICs are excluded. While total non-agency issuance is similar in the first 10 months of 2014 ($23.9 billion) to the first 10 months of 2013 ($24.2 billion), the composition is different. In 2014, the $14.2 billion of scratch and dent deals, comprised primarily of non-performing and re-performing loans, has far surpassed the volume of new prime deals, which total only $5.8 billion. For the same period in 2013, the split was nearly even: $12.3 billion in prime deals versus $12.2 billion in scratch and dent.

Sources: Inside Mortgage Finance and Urban Institute. Note: Year-to-date figure as of October 2014.

$-

$200

$400

$600

$800

$1,000

$1,200

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Q1

-3

($ billions) Re-REMICs and other

Scratch and dent

Alt A

Subprime

Prime

Sources: Inside Mortgage Finance and Urban Institute.

Non-Agency MBS Issuance

$3,370

$0 $5,804

$14,240 $374

11

AGENCY ACTIVITY: VOLUMES AND PURCHASE/ REFI COMPOSITION

Agency issuance continues declining, totaling $774.1 billion in the first ten months of 2014 compared to $1.407 trillion for the same period a year ago. Annualizing production year to date, 2014 is on pace for a total production of $928.8 billion, much less than the $1.57 trillion in 2013. In October 2014, refinances were 46 percent of the GSEs’ business, down from the first quarter’s averages of 52 and 55 percent, respectively. The Ginnie Mae market has always been more purchase-driven, with refinance volume of 25 percent.

OVERVIEW

$0.38

$0.26

$0.29

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Ann.

($ trillions)

Agency Gross Issuance

Fannie Mae Freddie Mac Ginnie Mae

Sources: eMBS and Urban Institute. Note: Year to date as of October 2014.

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Mortgage rate Percent refi

Percent Refi at Issuance Fannie Mae Freddie Mac Ginnie Mae Mortgage rate

Sources: eMBS and Urban Institute. Note: Based on at-issuance balance.

October 2014

12

STATE OF THE MARKET

MORTGAGE ORIGINATION PROJECTIONS

The sharp drop in mortgage originations in late 2013 and early 2014, combined with a gradual rise in interest rates and the Fed tapering, has led to lower origination projections for the next two years from the GSEs and MBA. The GSE projections suggest a decline in the refinance share occurring over the next 4 quarters to around 22 percent, while the MBA foresees a less pronounced drop to around 35 percent. Home sales are expected to be slightly softer in 2014 than in 2013, while housing starts are expected to pick up steam. Both housing starts and home sales are expected to strengthen considerably in 2015, though originations may taper substantially towards the second half of the year, according to the GSE projections in particular.

Total Originations and Refinance Shares

Housing Starts and Homes Sales

Originations ($ billions) Refi Share (%)

Period Total, FNMA

estimate Total, FHLMC

estimate Total, MBA

estimate FNMA

estimate FHLMC

estimate MBA

estimate

2014 Q1 250 250 247 49 48 50

2014 Q2 320 320 297 38 41 40

2014 Q3 350 320 300 36 45 38

2014 Q4 280 260 262 33 40 44

2015 Q1 280 265 270 37 35 47

2015 Q2 350 340 328 27 22 38

2015 Q3 270 260 318 26 16 34

2015 Q4 200 185 272 30 15 36

FY 2011 1496 1492 1436 66 64 65

FY 2012 2154 2122 2044 72 70 71

FY 2013 1866 1925 1845 60 59 60

FY 2014 1098 1200 1106 39 43 43

FY 2015 1013 1100 1188 30 23 38 Sources: Mortgage Bankers Association, Fannie Mae, Freddie Mac and Urban Institute. Note: Shaded boxes indicate forecasted figures. All figures are estimates for total single-family market; column labels indicate source of estimate. Forecasts include interest rates as well. The yearly averages for 2011, 2012, and 2013 were 4.5%, 3.7%, and 4.0%, respectively. The three sources project an annual average rate of 4.3% for 2014. For 2015, their projections ranged from 4.5% to 5%.

Housing Starts, thousands Home Sales. thousands

Year Total, FNMA

estimate

Total, FHLMC

estimate

Total, MBA

estimate

Total, FNMA estimate

Total, FHLMC

estimate

Total, MBA

estimate

Existing, MBA

estimate

New, MBA

Estimate

FY 2011 609 610 612 4566 4570 4501 4200 301

FY 2012 781 780 783 5028 5030 5030 4661 369

FY 2013 925 920 930 5519 5510 5505 5073 432

FY 2014 997 1000 998 5371 5310 5359 4915 444

FY 2015 1170 1200 1108 5661 5600 5666 5163 503

Sources: Mortgage Bankers Association, Fannie Mae, Freddie Mac and Urban Institute.

Note: Shaded boxes indicate forecasted figures. All figures are estimates for total single-family market. Column labels indicate source of estimate.

13

ORIGINATOR PROFITABILITY STATE OF THE MARKET

When originator profitability is high, mortgage rates tend to be less responsive to the general level of interest rates, as originators are capacity-constrained. When originator profitability is low, mortgage rates are far more responsive to the general level of interest rates. As interest rates have risen from the lows in 2012, and fewer borrowers find it economical to refinance, originator profitability is lower. Originator profitability is often measured as the spread between the rate the borrower pays for the mortgage (the primary rate) and the yield on the underlying mortgage-backed security in the secondary market (the secondary rate). However, with guarantee fees up dramatically from 2011 levels, the so-called primary-secondary spread has become a very imperfect measure to compare profitability across time. The measure used here, Originator Profitability and Unmeasured Costs (OPUC), is formulated and calculated by the Federal Reserve Bank of New York. It looks at the price at which the originator actually sells the mortgage into the secondary market and adds the value of retained servicing (both base and excess servicing, net of g-fees) as well as points paid by the borrower.

Sources: Federal Reserve Bank of New York, updated monthly and available at this link: http://www.ny.frb.org/research/epr/2013/1113fust.html and Urban Institute. Note: OPUC stands for "originator profits and unmeasured costs" as discussed in Fuster et al. (2013). The OPUC series is a monthly (4-week moving) average.

$2.29

0

1

2

3

4

5

6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Dollars per $100 loan

Originator Profitability and Unmeasured Costs

October 2014

14

CREDIT AVAILABILITY FOR

Access to credit has become extremely tight, especially for borrowers with low FICO scores. The mean and median FICO scores on new originations have both drifted up over the last decade by about 41 and 43 points, respectively. The 10th percentile of FICO scores, which represents the lower bound of creditworthiness needed to qualify for a mortgage, stood at 662 as of August 2014. Prior to the housing crisis, this threshold held steady in the low 600s. LTV levels at origination remain relatively high, averaging 85.1, which reflects the large number of FHA and VA purchase originations.

CREDIT AVAILABILITY FOR PURCHASE LOANS

STATE OF THE MARKET

100

85 90

67

30

40

50

60

70

80

90

100

110

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

LTV

Combined LTV at Origination

90th percentile Mean Median 10th percentile

Sources: CoreLogic Prime Servicing and Urban Institute. Note: Purchase-only loans.

801

740

749

662

500

550

600

650

700

750

800

850

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

FICO Score

Borrower FICO Score at Origination

90th percentile Mean Median 10th percentile

Sources: CoreLogic Prime Servicing and Urban Institute. Note: Purchase-only loans.

August 2014

August 2014

15

CREDIT AVAILABILITY FOR CREDIT AVAILABILITY FOR PURCHASE LOANS

STATE OF THE MARKET

Credit has been tight for all borrowers with less-than-stellar credit scores, but there are significant variations across MSAs. For example, the mean origination FICO for borrowers in San Francisco- Redwood City- South San Francisco, CA is 771, while in Detroit-Dearborn-Livonia MI it is 726. Across all MSAs, lower average FICO scores tend to be correlated with high average LTVs, as these MSAs rely heavily on FHA/VA financing.

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Mean origination FICO score Mean origination LTV

Sources: CoreLogic Prime Servicing as of August 2014 and Urban Institute. Note: Purchase-only loans.

16

HOUSING AFFORDABILITY STATE OF THE MARKET

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Ratio

Affordability Adjusted for MSA-Level DTI

Sources: CoreLogic, US Census, Freddie Mac and UI calculations based on NAR methodology. Note: Affordability index is calculated relative to home prices in 2000-03. A ratio above 1 indicates higher affordability in August 2014 than in 2000-03.

Credit Bubble

$210,000

$280,133

$238,861

$120

$140

$160

$180

$200

$220

$240

$260

$280

$300

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Housing Prices ($ thousands)

National Housing Affordability Over Time

Median sales price Max affordable price

Max affordable price at 6.0% rateHome prices are still very affordable by historical standards, despite increases over the last three years. Even if interest rates rose to 6 percent, affordability would be at the long term historical average.

Sources: CoreLogic, US Census, Freddie Mac and Urban Institute. Note: The maximum affordable price is the house price that a family can afford putting 20 percent down, with a monthly payment of 28 percent of median family income, at the Freddie Mac prevailing rate for 30-year fixed-rate mortgage, and property tax and insurance at 1.75 percent of housing value.

August 2014

17

MSA

HPI changes (%) % Rise needed to achieve

peak 2000 to peak Peak to trough

Trough to current

United States 99.0 -32.4 29.3 14.5

New York-Jersey City-White Plains NY-NJ 115.8 -20.0 16.6 7.2

Los Angeles-Long Beach-Glendale CA 181.6 -39.1 43.7 14.3

Chicago-Naperville-Arlington Heights IL 65.4 -36.5 25.7 25.2

Atlanta-Sandy Springs-Roswell GA 40.8 -33.3 38.5 8.2

Washington-Arlington-Alexandria DC-VA-MD-WV 159.8 -33.3 28.7 16.6

Houston-The Woodlands-Sugar Land TX 44.3 -12.7 30.5 -12.2

Phoenix-Mesa-Scottsdale AZ 126.3 -52.8 47.7 43.4

Riverside-San Bernardino-Ontario CA 194.4 -53.3 48.3 44.4

Dallas-Plano-Irving TX 38.2 -13.7 26.7 -8.6

Minneapolis-St. Paul-Bloomington MN-WI 74.0 -30.5 27.2 13.2

Seattle-Bellevue-Everett WA 94.3 -31.9 34.8 8.9

Denver-Aurora-Lakewood CO 36.2 -14.4 34.0 -12.8

Baltimore-Columbia-Towson MD 128.8 -25.6 10.3 21.7

San Diego-Carlsbad CA 148.8 -38.2 37.7 17.6

Anaheim-Santa Ana-Irvine CA 162.5 -36.8 38.4 14.4

Orlando-Kissimmee-Sanford FL 148.1 -55.1 40.5 58.6

Miami-Miami Beach-Kendall FL 204.3 -52.8 46.6 44.5

Sources: CoreLogic HPIs as of September 2014 and Urban Institute. Note: This table includes the largest 15 Metropolitan areas by mortgage count.

Changes in CoreLogic HPI for Top MSAs Despite rising 29.3 percent from the trough, national house prices still must grow 14.5 percent to reach pre-crisis peak levels. At the MSA level, three of the top 15 MSAs have reached their peak HPI– Houston, TX; Dallas, TX; and Denver, CO. Two MSAs particularly hard hit by the boom and bust– Phoenix, AZ and Riverside, CA– would need to rise more than 40 percent to return to peak levels.

HOME PRICE INDICES STATE OF THE MARKET

CoreLogic HPI

5.6% Zillow HVI

6.5%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Year-over-year growth rate

National Year-Over-Year HPI Growth

Sources: CoreLogic, Zillow and Urban Institute.

The strong year-over-year house price growth through 2013 has slowed somewhat in 2014, as indicated by both the repeat-sales HPI from CoreLogic and hedonic index from Zillow.

September2014

18

STATE OF THE MARKET

NEGATIVE EQUITY & SERIOUS DELINQUENCY

Negative equity 10.7%

Near or in negative equity

13.4%

0%

5%

10%

15%

20%

25%

30%

35%

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

1Q

11

2Q

11

3Q

11

4Q

11

1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

Negative Equity Share

Sources: CoreLogic and Urban Institute.

With housing prices appreciating through the first half of 2014, residential properties in negative equity (LTV greater than 100) as a share of all residential properties with a mortgage has dropped to 10.7 percent. Residential properties in near negative equity (LTV between 95 and 100) comprise another 2.7 percent.

4.7%

2.4%

2.3%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

3Q

00

1Q

01

3Q

01

1Q

02

3Q

02

1Q

03

3Q

03

1Q

04

3Q

04

1Q

05

3Q

05

1Q

06

3Q

06

1Q

07

3Q

07

1Q

08

3Q

08

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

3Q

14

Loans in Serious Delinquency/Foreclosure

Percent of loans 90days delinquent or inforeclosure

Percent of loans inforeclosure

Percent of loans 90days delinquent

Sources: Mortgage Bankers Association and Urban Institute.

Serious delinquencies and foreclosures continue to decline with the housing recovery, but remain quite high relative to the early 2000s. Loans 90 days delinquent or in foreclosure totaled 4.7 percent in the third quarter of 2014, down from 5.7 percent for the same quarter a year earlier.

19

Freddie and Fannie continue to shrink their portfolios, albeit at a slower rate than at any point over the past 4 years. Year-over-year, Fannie has contracted by 15.1 percent, and Freddie Mac by 16.9 percent. As of September 2014, they were both below their year-end 2014 portfolio cap. They are shrinking their less liquid assets (mortgage loans and non-agency MBS) at close to the same pace that they are shrinking their entire portfolio.

GSE PORTFOLIO WIND-DOWN GSES UNDER CONSERVATORSHIP

0

100

200

300

400

500

600

700

800

900

2006 2007 2008 2009 2010 2011 2012 2013 2014

($ billions)

FHLMC MBS in portfolio Non-FHLMC agency MBS Non-agency MBS Mortgage loans

Sources: Freddie Mac and Urban Institute.

Freddie Mac Mortgage-Related Investment Portfolio Composition

0

100

200

300

400

500

600

700

800

900

2006 2007 2008 2009 2010 2011 2012 2013 2014

($ billions)

Fannie MBS in portfolio Non-FNMA agency MBS Non-agency MBS Mortgage loans

Sources: Fannie Mae and Urban Institute.

Fannie Mae Mortgage-Related Investment Portfolio Composition

0

100

200

300

400

500

600

700

800

2012 2013 2014

Current size: $438.1 billion Current cap: $469.625 billion Shrinkage year-over-year: 15.1% Shrinkage in less-liquid assets year-over-year: 12.8%

September 2014 September 2014

0100200300400500600700

2012 2013 2014

Current size: $413.6 billion Current cap: $469.625 billion Shrinkage year-over-year: 16.9% Shrinkage in less-liquid assets year-over-year: 19.5%

September 2014 September 2014

20

GSES UNDER CONSERVATORSHIP

EFFECTIVE GUARANTEE FEES AND GSE RISK-SHARING TRANSACTIONS

Fannie Mae Upfront Loan-Level Price Adjustments (LLPAs)

LTV

Credit Score ≤60 60.01 – 70 70.01 – 75 75.01 – 80 80.01 – 85 85.01 – 90 90.01 – 95

> 740 0.000% 0.250% 0.250% 0.500% 0.500% 0.500% 0.500%

720 – 739 0.000% 0.250% 0.500% 0.750% 0.750% 0.750% 0.750%

700 – 719 0.000% 0.750% 1.000% 1.250% 1.250% 1.250% 1.250%

680 – 699 0.250% 0.750% 1.500% 2.000% 1.750% 1.500% 1.500%

660 – 679 0.250% 1.250% 2.250% 2.750% 3.000% 2.500% 2.500%

640 – 659 0.750% 1.500% 2.750% 3.250% 3.500% 3.000% 3.000%

620 – 639 0.750% 1.750% 3.250% 3.250% 3.500% 3.500% 3.500%

< 620 0.750% 1.750% 3.250% 3.250% 3.500% 3.500% 3.500%

Product Feature (Cumulative)

Investment Property 1.750% 1.750% 1.750% 3.000% 3.750% N/A N/A

2-unit property 1.000% 1.000% 1.000% 1.000% 1.000% N/A N/A

2-4 unit property 1.000% 1.000% 1.000% 1.000% 1.000% N/A N/A

Condominiums 0.000% 0.000% 0.000% 0.750% 0.750% 0.750% 0.750%

Sources: Fannie Mae and Urban Institute. Note: Adverse Market Delivery Charge (AMDC) of 0.250% has been added to the LLPA numbers in the matrix by LTV and credit score. Freddie Mac charges very comparable LLPAs.

41.2

63.5

32.4

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

1Q

11

2Q

11

3Q

11

4Q

11

1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

3Q

14

Effective Guarantee Fees

Fannie Mae single-family effective g-fee rate

Fannie Mae single-family averagecharged g-fee on new acquisitions

Freddie Mac management and g-feerate

Fannie’s average charged g-fee on new single-family originations was 63.5 bps in Q3 2014, up from both the previous quarter (62.6) and from a year earlier (56.9). This is a marked increase over 2012 (39.9 bps) and 2011 (28.8 bps), and has contributed to the GSEs’ profits. Fannie’s 2014 loan-level price adjustments (LLPAs) are shown in the second table. The 25 bp Adverse Market Delivery Charge has been added to these upfront numbers.

Sources: Fannie Mae, Freddie Mae and Urban Institute. Note: Freddie only reports the effective g-fee on the entire book of business.

21

Sources: Fannie Mae, Freddie Mac and Urban Institute. Note: Classes A-H, M-1H, M-2H, and B-H are reference tranches only. These classes are not issued or sold. The risk is retained by Fannie Mae and Freddie Mac. Class X-IO is an interest-only class and is not entitled to principal distributions. “CE” = credit enhancement. Under “Rating,” “F” = Fitch, “M” = Moody’s.

GSE RISK-SHARING TRANSACTIONS

GSES UNDER CONSERVATORSHIP

Freddie Mac – Structured Agency Credit Risk (STACR)

Date Transaction Reference Pool Size

($ millions)

July 24, 2013 STACR Series 2013 - DN1 $22,584.40

November 12, 2013 STACR Series 2013 - DN2 $35,327.30

February 6, 2014 STACR Series 2014 - DN1 $32,076.80

April 2, 2014 STACR Series 2014 - DN2 $28,146.98

August 6, 2014 STACR Series 2014 - DN3 $19,746.23

August 6, 2014 STACR Series 2014 – HQ1 $9,974.68

September 10, 2014 STACR Series 2014 – HQ2 $33,434.43

Freddie Mac Total Reference Collateral $181,290.82

Percent of Freddie Mac’s Total Book of Business 11.9%

Fannie Mae – Connecticut Avenue Securities (CAS)

Date Transaction Reference Pool Size

($ millions)

October 24, 2013 CAS 2013 - C01 $26,756.40

January 14, 2014 CAS 2014 - C01 $29,308.70

May 28, 2014 CAS 2014 - C02 $60,818.48

July 25, 2014 CAS 2014 – C03 $78,233.73

Fannie Mae Total Reference Collateral $195,117.31

Percent of Fannie Mae’s Total Book of Business 7.5%

New Front-end Transaction: JP Morgan Madison Avenue Securities Trust, Series 2014-1

Class Amount

($ millions) Tranche Thickness

(%) CE (%) Rating Coupon

A-H $942.15 95.25 4.75 NR N/A

M-1 $19.78 2.00 2.75 F: BBB-sf 1mL +225 bps

M-2 $27.20 2.75 2.00 NR 1mL +425 bps

X-IO $989.13 NA NA NR 26.88 bps

Reference Pool Size $989.13 100

22

SERIOUS DELINQUENCY RATES AT THE GSEs

Serious delinquency rates of single-family GSE loans continue to decline as the legacy portfolio is resolved and the pristine, post-2009 book of business exhibits very low default rates. As of August 2014, 1.96 percent of both the Fannie portfolio and the Freddie portfolio were seriously delinquent, down from 2.55 percent for Fannie and 2.58 percent for Freddie in September 2013.

GSES UNDER CONSERVATORSHIP

SERIOUS DELINQUENCY RATES

1.68%

3.66%

1.96%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Percentage of total loans

Serious Delinquency Rates–Fannie Mae

Single-family: Non-credit enhanced Single-family: Credit enhanced Single-family: Total

Sources: Fannie Mae and Urban Institute.

1.80%

3.89%

1.96% 2.84%

0%

1%

2%

3%

4%

5%

6%

7%8%

9%

10%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Percentage of total loans

Serious Delinquency Rates–Freddie Mac

Single-family: Non-credit enhanced Single-family: Credit enhanced

Single-family: Total PMI Credit Enhanced*

Sources: Freddie Mac and Urban Institute. Note*: Following a change in Freddie reporting in September 2014, we switched from reporting credit enhanced delinquency rates to PMI credit enhanced delinquency rates.

September 2014

September 2014

23

SERIOUS DELINQUENCY RATES GSES UNDER CONSERVATORSHIP

Serious delinquencies for FHA and GSE single-family loans continue to decline, but remain high relative to 2005-2007. FHA delinquencies are declining from a higher relative starting point. GSE multifamily delinquencies have declined to pre-crisis levels, though they did not reach problematic levels even in the worst years.

0.09%

0.03% 0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

0.9%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Percentage of total loans

Serious Delinquency Rates–Multifamily GSE Loans Fannie Mae Freddie Mac

Sources: Fannie Mae, Freddie Mac and Urban Institute. Note: Multifamily serious delinquency rate is the unpaid balance of loans 60 days or more past due, divided by the total unpaid balance.

6.22%

2.05%

2.07%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Percentage of total loans

Serious Delinquency Rates–Single-Family Loans

FHA Fannie Mae Freddie Mac

Sources: Fannie Mae, Freddie Mac, MBA Delinquency Survey and Urban Institute. Note: Serious delinquency is defined as 90 days or more past due or in the foreclosure process.

September 2014

2Q2014

24

REFINANCE ACTIVITY GSES UNDER CONSERVATORSHIP

The Home Affordable Refinance Program (HARP) refinances have begun to slow. Two factors are responsible for this: (1) higher interest rates, leaving fewer eligible loans where refinancing is economically advantageous (in-the-money), and (2) a considerable number of borrowers who have already refinanced. Nonetheless, HARP refinances total 3.2 million since the Q2 2009 program inception, accounting for 16.3 percent of all GSE refinances in this period.

HARP Refinances

August 2014

Year-to-date 2014

Inception to date

2013 2012 2011

Total refinances 131,075 966,132 19,838,384 4,081,911 4,750,530 3,229,066

Total HARP refinances 14,066 160,706 3,218,662 892,914 1,074,769 400,024

Share 80–105 LTV 71.8% 71.7% 69.8% 56.4% 56.4% 85.0%

Share 105–125 LTV 18.0% 17.4% 17.2% 22.4% 22.4% 15.0%

Share >125 LTV 10.1% 10.9% 12.9% 21.2% 21% 0%

All other streamlined refinances

19,002 189,419 3,439,618 735,210 729,235 785,049

Sources: FHFA Refinance Report and Urban Institute.

9

5

14

0

20

40

60

80

100

120

140

160

Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14

(thousands)

Total HARP Refinance Volume

Fannie Mae Freddie Mac Total

Sources: FHFA Refinance Report and Urban Institute.

August 2014

25

To qualify for HARP, a loan must be originated before the June 2009 cutoff date, have a marked-to-market loan-to-value (MTM LTV) ratio above 80, and have no more than one delinquent payment in the past year and none in the past six months. There are 829,359 eligible loans, but 43 percent are out-of-the-money because the closing cost would exceed the long-term savings, leaving 470,245 loans where a HARP refinance is both permissible and economically advantageous for the borrower. Loans below the LTV minimum but meeting all other HARP requirements are eligible for GSE streamlined refinancing. Of the 6,909,943 loans in this category, 5,421,496 are in-the-money. More than two thirds of the GSE book of business that meets the pay history requirements was originated after the June, 2009 cutoff date. FHFA Director Mel Watt announced in May 2014 that they are not planning to extend the date, as too few borrowers (523,458 by our estimate) would benefit from the change.

GSES UNDER CONSERVATORSHIP

GSE LOANS: POTENTIAL REFINANCES

Sources: CoreLogic Prime Servicing as of September 2014. Note: Figures are scaled up from source data to account for data coverage of the GSE active loan market (based on MBS data from eMBS). Shaded box indicates HARP-eligible loans that are in-the-money.

Total loan count 26,823,087

Loans that do not meet pay history requirement 925,941

Loans that meet pay history requirement: 25,897,146

Pre-June 2009 origination 7,739,302

Post-June 2009 origination 18,157,844

Loans Meeting HARP Pay History Requirements

Pre-June 2009

LTV category In-the-money Out-of-the-money Total

≤80 5,421,496 1,488,447 6,909,943

>80 470,245 359,114 829,359

Total 5,891,741 1,847,561 7,739,302

Post-June 2009

LTV category In-the-money Out-of-the-money Total

≤80 2,630,881 12,918,150 15,549,031

>80 523,458 2,085,355 2,608,813

Total 3,154,339 15,003,505 18,157,844

HAMP ACTIVITY

26

New HAMP trial mods have tapered off as new defaults have declined. Meanwhile, modification success rates are improving, so the number of new permanent modifications remains stable, at 10,000 in June compared to 12,000 in each of the two months prior. Active permanent mods have increased 8 percent since June 2013 to 959,000 (bottom).

MODIFICATION ACTIVITY

All trials mods started 2.2

All permanent mods started 1.4

Active permanent mods

1.0

0.0

0.5

1.0

1.5

2.0

2.5

2009 2010 2011 2012 2013 2014

Number of mods (millions)

Cumulative HAMP Modifications

Sources: U.S. Treasury Making Home Affordable and Urban Institute.

10.0

9.0 4.3

0

20

40

60

80

100

120

140

160

180

2009 2010 2011 2012 2013 2014

Number of mods (thousands)

New HAMP Modifications New trial mods started New permanent mods started New active permanent mods

Sources: U.S. Treasury Making Home Affordable and Urban Institute. June 2014

June 2014

27

The share of principal reduction modifications peaked at 20 percent in December 2012 before dropping dramatically to 5 percent in Q2 2014. This is to be expected, as increasing home prices have increased equity, reducing the need for principal reduction and making such modifications less likely to be net-present-value positive. Portfolio loans are the most likely candidates for principal reduction, followed by private investor loans, because the GSEs and FHA/VA generally do not allow this type of modification.

MODIFICATION ACTIVITY

MODIFICATION BY TYPE OF ACTION AND BEARER OF RISK

Sources: OCC Mortgage Metrics Report for the Second Quarter of 2014 and Urban Institute. Note: This table presents modifications of each type as a share of total modifications. Columns sum to over 100% because loans often receive modifications with multiple features. *Processing constraints at some servicers prevented them from reporting specific modified term(s).

Sources: OCC Mortgage Metrics Report for the Second Quarter of 2014 and Urban Institute. Note: This table presents modifications of each type as a share of total modifications. Columns sum to over 100% because loans often receive modifications with multiple features. *Processing constraints at some servicers prevented them from reporting specific modified term(s).

Changes in Loan Terms for Modifications

Modification Quarter One quarter

% change One year % change

13Q1 13Q2 13Q3 13Q4 14Q1 14Q2

Capitalization 79.3 81.6 83.5 87.7 74.3 59 -20.6 -27.7

Rate reduction 80.1 81.0 78.9 76.7 73.3 71.9 -1.9 -11.3

Rate freeze 3.7 5.2 5.5 7 6.5 7.1 8.7 36.9

Term extension 60.3 67.7 69.3 75.9 78 84 7.7 24.1

Principal reduction 15.2 12.2 13.6 10.5 8.1 5 -38.4 -58.8

Principal deferral 18.2 20.5 25.3 30.6 25.1 11.5 -54.1 -43.8

Not reported* 0.7 1.5 2.2 0.7 0.7 0.7 5.0 -52.1

Type of Modification Action by Investor and Product Type

Fannie Mae Freddie Mac

Government- guaranteed

Private Investor

Portfolio Overall

Capitalization 97.3% 96.6% 21.8% 91.0% 94.1% 59.0%

Rate reduction 52.1% 70.0% 78.0% 73.3% 72.1% 71.9%

Rate freeze 10.2% 5.7% 6.8% 4.1% 8.5% 7.1%

Term extension 93.0% 94.0% 96.6% 31.9% 59.2% 84.0%

Principal reduction 0.1% 0.0% 0.1% 16.2% 25.5% 5.0%

Principal deferral 13.5% 18.5% 3.9% 23.1% 22.1% 11.5%

Not reported* 0.6% 0.2% 0.8% 1.2% 0.3% 0.7%

MODIFICATIONS AND LIQUIDATIONS

28

MODIFICATION ACTIVITY

Total modifications (HAMP and proprietary) are now roughly equal to total liquidations. Hope Now reports show 7,236,907 borrowers have received a modification since Q3 2007, compared with 7,323,459 liquidations in the same period. Both liquidation and modification activity are on pace to end significantly below their 2013 totals, and we expect to see even sharper declines as 2014 comes to a close.

14

7.3

34

0.1

6

11

.6

0

200

400

600

800

1,000

1,200

1,400

1,600

2007 (Q3-Q4)

2008 2009 2010 2011 2012 2013 2014(Ann.)

Number of loans (thousands)

Loan Modifications and Liquidations

HAMP mods

Proprietary mods

Liquidations

Sources: Hope Now Reports and Urban Institute. Note: Liquidations includes both foreclosure sales and short sales. Annualized figure based on data from August 2014.

1.4

5

.8

7.3

0

1

2

3

4

5

6

7

8

2007 (Q3-Q4)

2008 2009 2010 2011 2012 2013 2014 YTD

Number of loans (millions)

HAMP mods

Proprietary mods

Liquidations

Sources: Hope Now Reports and Urban Institute. Note: Liquidations includes both foreclosure sales and short sales.

Cumulative Modifications and Liquidations

29

MODIFICATION REDEFAULT RATES BY BEARER OF THE RISK

MODIFICATION ACTIVITY

Redefault rates on modified loans have come down dramatically from 2008 to 2013. For the period as a whole, the steepest drops have been on private label modifications. More recently, there have been sharp declines in the redefault rates on government-guaranteed modifications, although this product type still has higher redefault rates than others.

0%

10%

20%

30%

40%

50%

60%

70%

80%

2008 2009 2010 2011 2012 2013

Re

de

fau

lt r

ate

Year of modification

Redefault Rate 12 Months after Modification

Fannie Mae

Freddie Mac

Government-guaranteed

Private

Portfolio Loans

Overall

Sources: OCC Mortgage Metrics Report for the Second Quarter of 2014 and Urban Institute.

0%

10%

20%

30%

40%

50%

60%

70%

80%

2008 2009 2010 2011 2012

Re

de

fau

lt r

ate

Year of modification

Redefault Rate 24 Months after Modification

Fannie Mae

Freddie Mac

Government-guaranteed

Private

Portfolio loans

Overall

Sources: OCC Mortgage Metrics Report for the Second Quarter of 2014 and Urban Institute.

30

Agency Gross Issuance Agency Net Issuance

AGENCY GROSS AND NET ISSUANCE

AGENCY ISSUANCE

Issuance Year

GSEs Ginnie Mae Total

2000 $360.6 $102.2 $462.8

2001 $885.1 $171.5 $1,056.6

2002 $1,238.9 $169.0 $1,407.9

2003 $1,874.9 $213.1 $2,088.0

2004 $872.6 $119.2 $991.9

2005 $894.0 $81.4 $975.3

2006 $853.0 $76.7 $929.7

2007 $1,066.2 $94.9 $1,161.1

2008 $911.4 $267.6 $1,179.0

2009 $1,280.0 $451.3 $1,731.3

2010 $1,003.5 $390.7 $1,394.3

2011 $879.3 $315.3 $1,194.7

2012 $1,288.8 $405.0 $1,693.8

2013 $1,176.6 $393.6 $1,570.1

2014 YTD $530.9 $243.2 $774.1

%Change year-over-year

-49.9% -30.2% -45.0%

2014 (Ann.) $637.10 $291.78 $928.88

Sources: eMBS and Urban Institute. Note: Dollar amounts are in billions. Year-to-date figure as of October 2014.

Issuance Year

GSEs Ginnie Mae Total

2000 $159.8 $29.3 $189.1

2001 $367.8 -$9.9 $357.9

2002 $357.6 -$51.2 $306.4

2003 $335.0 -$77.6 $257.4

2004 $83.3 -$40.1 $43.2

2005 $174.4 -$42.2 $132.1

2006 $313.6 $0.3 $313.8

2007 $514.7 $30.9 $545.5

2008 $314.3 $196.4 $510.7

2009 $249.5 $257.4 $506.8

2010 -$305.5 $198.2 -$107.3

2011 -$133.4 $149.4 $16.0

2012 -$46.5 $118.4 $71.9

2013 $66.5 $85.8 $152.3

2014 YTD $19.0 $51.8 $70.8

%Change year-over-year

-66.6% -31.1% -46.4%

2014 (Ann.) $22.76 $62.20 $84.96

Sources: eMBS and Urban Institute. Note: Dollar amounts are in billions. Year-to-date figure as of October 2014.

With refinancing activity falling off with rising interest rates, newly issued agency securities (agency gross issuance) have fallen off as well. Agency gross issuance year-to-date (through October) totaled $774 billion, a 45 percent decline year-over-year. Net issuance, which excludes repayments, prepayments, and refinances on outstanding mortgages, remains low and dominated by Ginnie Mae. This is unsurprising, given the increased role of FHA and VA since the crisis.

31

AGENCY GROSS AND NET ISSUANCE BY MONTH

AGENCY ISSUANCE

AGENCY GROSS ISSUANCE & FED PURCHASES

0

50

100

150

200

250

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

($ billions)

Monthly Gross Issuance Fannie Mae Freddie Mac Ginnie Mae

Sources: eMBS, Federal Reserve Bank of New York and Urban Institute.

While government and GSE lending have dominated the mortgage market since the crisis, there has been a change in the mix. The Ginnie Mae share reached a peak of 28 percent of total agency issuance in 2010, declined to 25 percent in 2013, and has since then risen to 31 percent in October 2014. The recent increase in the Ginnie Mae share reflects the decline in refinance activity, as Ginnie Mae is less impacted by this decline.

0

50

100

150

200

250

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

($ billions)

Fed Absorption of Agency Gross Issuance

Gross issuance Total Fed purchases

Sources: eMBS, Federal Reserve Bank of New York and Urban Institute.

In 2013, the Fed absorbed nearly 50 percent of agency gross issuance. In Q1 2014, the Fed began to taper, but gross issuance dropped even more, and Fed absorption reached 74 percent. More recently, gross issuance increased and the Fed has continued to taper, resulting in the Fed absorbing a lower percent of gross issuance. In October, Fed announced the end of its purchase program. However, buying will continue at a much reduced level, as the Fed is likely to keep reinvesting funds from pay downs on mortgages and agency debentures into the mortgage market. In the program’s last month, total Fed purchase declined to $ 25.5 billion, yielding 27 percent Fed absorption of gross issuance, down from September’s 33 percent.

October 2014

October 2014

32

MORTGAGE INSURANCE ACTIVITY

AGENCY ISSUANCE

41

.3%

3

4.0

%

24

.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Q1-3

MI Market Share Total private primary MI FHA VA

Sources: Inside Mortgage Finance and Urban Institute.

Private, $54.0

FHA, $38.0

VA, $31.1

Total, $123.0

0

50

100

150

200

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

MI Activity

Sources: Inside Mortgage Finance and Urban Institute.

Overall mortgage insurance activity experienced a second consecutive quarter of significant increase in Q3 2014, reaching $123 billion. Private mortgage insurers lead the way, with a $10 billion quarterly increase and a jump in market share to 44 percent (41 percent for 2014 overall). The FHA share dropped to 30.8 percent for the quarter, and 34 percent for 2014 overall, despite an uptick in endorsements to $38 billion from $36 billion in Q2 2014.

33

MORTGAGE INSURANCE ACTIVITY

AGENCY ISSUANCE

FHA MI Premiums for Typical Purchase Loan

Case number date Upfront mortgage insurance premium

(UFMIP) paid Annual mortgage insurance

premium (MIP) 1/1/2001 - 7/13/2008 150 50

7/14/2008 - 9/30/2008* 175 55

10/1/2008 - 4/4/2010 175 55

4/5/2010 - 10/3/2010 225 55

10/4/2010 - 4/17/2011 100 90

4/18/2011 - 4/8/2012 100 115

4/9/2012 - 6/10/2012 175 125

6/11/2012 - 3/31/2013a 175 125

4/1/2013 - presentb 175 135

Sources: Ginnie Mae and Urban Institute. Note: A typical purchase loan has an LTV over 95 and a loan term longer than 15 years. Mortgage insurance premiums are listed in basis points. * For a short period the FHA used a risk based FICO/LTV matrix for MI. This table assumes the average FICO for 2008 purchase originations, ~630. a Applies to purchase loans less than or equal to $625,500. Those over that amount have an annual premium of 150 bps.

b Applies to purchase loans less than or equal to $625,500. Those over that amount have an annual premium of 155 bps.

The top table depicts the history of FHA mortgage insurance premiums since 2001. Annual premiums have more than doubled since 2008, as FHA has worked to shore up its finances. The most recent change increased the annual premium by 10 bps and kept the upfront premium at 1.75 percent. The bottom table compares FHA and GSE execution. For a 95 LTV mortgage, borrowers with a FICO score below 680 will find FHA a more attractive product, while those above 680 will find GSE execution with PMI to be more favorable.

Assumptions Property Value $250,000 Loan Amount $237,500 LTV 95 Base Rate

Conforming 4.29% FHA 4.00%

Initial Monthly Payment Comparison: FHA vs. PMI

FICO 620 - 639 640 - 659 660 - 679 680 - 699 700 - 719 720 - 739 740 - 759 760 +

FHA MI Premiums

FHA UFMIP 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1.75

FHA MIP* 1.30 1.30 1.30 1.30 1.30 1.30 1.30 1.30

PMI

GSE AMDC & LLPA 3.50 3.00 2.50 1.50 1.25 0.75 0.50 0.50

PMI Annual MIP 1.15 1.15 1.15 0.89 0.89 0.62 0.62 0.54

Monthly Payment

FHA $1,411 $1,411 $1,411 $1,411 $1,411 $1,411 $1,411 $1,411

PMI $1,501 $1,487 $1,472 $1,392 $1,385 $1,318 $1,311 $1,295

PMI Advantage ($90) ($76) ($61) $19 $26 $93 $100 $116

Sources: Genworth Mortgage Insurance, Ginnie Mae and Urban Institute. Note: Mortgage insurance premiums listed in percentage points. LLPA= Loan Level Price Adjustment, described in detail on page 20. FHA MIP=1.3 percent for <95 LTV mortgages. Orange shade indicates FHA monthly payment is more favorable, while light blue indicates PMI is more favorable.

34

Balance on 30-year, Fixed-rate, Full-doc, Amortizing Loans

Origination Year

Origination FICO

LTV Total

≤70 70 to 80 80 to 90 >90

1999-2004

≤700 10.3% 16.8% 5.0% 5.0% 37.1%

700 to 750 9.6% 14.4% 3.4% 3.1% 30.4%

>750 14.1% 14.1% 2.3% 1.9% 32.4%

Total 34.0% 45.3% 10.7% 10.0% 100.0%

2005

≤700 13.7% 17.4% 3.8% 2.6% 37.4%

700 to 750 10.0% 13.5% 2.1% 1.3% 27.0%

>750 15.9% 16.6% 1.8% 1.2% 35.6%

Total 39.6% 47.5% 7.7% 5.1% 100.0%

2006

≤700 13.7% 18.2% 3.9% 2.5% 38.3%

700 to 750 9.1% 13.8% 2.2% 1.2% 26.3%

>750 14.4% 17.8% 2.1% 1.2% 35.4%

Total 37.2% 49.8% 8.2% 4.9% 100.0%

2007

≤700 11.6% 16.9% 5.9% 3.5% 37.9%

700 to 750 8.1% 12.8% 3.0% 1.7% 25.6%

>750 13.9% 18.0% 2.9% 1.8% 36.5%

Total 33.5% 47.7% 11.8% 7.0% 100.0%

2008

≤700 8.2% 8.1% 3.3% 2.4% 22.0%

700 to 750 8.3% 12.8% 4.4% 2.8% 28.3%

>750 17.7% 23.8% 5.2% 3.0% 49.7%

Total 34.3% 44.7% 12.9% 8.2% 100.0%

2009-2010

≤700 4.0% 3.2% 0.3% 0.2% 7.7%

700 to 750 9.0% 11.9% 1.8% 0.9% 23.7%

>750 31.1% 32.2% 3.8% 1.5% 68.6%

Total 44.1% 47.4% 5.9% 2.7% 100.0%

2011-3Q13

≤700 2.9% 3.8% 0.7% 0.9% 8.3%

700 to 750 6.8% 10.7% 2.6% 3.1% 23.2%

>750 26.0% 31.1% 5.9% 5.5% 68.5%

Total 35.7% 45.5% 9.2% 9.6% 100.0%

Total 36.6% 46.2% 9.4% 7.9% 100.0%

Sources: Fannie Mae and Urban Institute. Note: Fannie Mae loan level credit data includes loans originated from Q1 1999 to Q3 2013. The percentages are weighted by origination balance.

Since 2008, the composition of loans purchased by Fannie Mae has shifted towards borrowers with higher FICO scores. For example, 68.5 percent of loans originated from 2011 to Q3 2013 were for borrowers with FICO scores above 750, compared to 36.5 percent of borrowers in 2007 and 32.4 percent from 1999-2004.

FANNIE MAE COMPOSITION SPECIAL FEATURE: LOAN LEVEL GSE CREDIT DATA

35

Default Rate on 30-year, Fixed-rate, Full-doc, Amortizing Loans

Origination Year

Origination FICO

LTV Total

≤70 70 to 80 80 to 90 >90

1999-2004

≤700 3.3% 4.3% 5.8% 6.6% 4.5%

700 to 750 1.0% 1.7% 2.7% 2.8% 1.7%

>750 0.4% 0.8% 1.5% 1.7% 0.7%

Total 1.5% 2.4% 3.9% 4.5% 2.4%

2005

≤700 12.8% 16.5% 19.3% 20.8% 15.7%

700 to 750 5.6% 8.9% 11.8% 12.0% 8.1%

>750 2.0% 4.3% 7.0% 8.1% 3.5%

Total 6.6% 10.1% 14.4% 15.5% 9.3%

2006

≤700 17.0% 21.5% 25.3% 26.6% 20.6%

700 to 750 7.9% 12.5% 15.7% 15.9% 11.4%

>750 2.8% 5.8% 9.1% 9.5% 4.9%

Total 9.3% 13.4% 18.7% 19.7% 12.6%

2007

≤700 18.3% 22.7% 30.7% 31.1% 23.3%

700 to 750 7.8% 13.1% 19.7% 18.4% 12.6%

>750 2.7% 5.9% 11.7% 11.6% 5.4%

Total 9.3% 13.8% 23.2% 23.1% 14.0%

2008

≤700 13.1% 16.2% 23.1% 23.0% 16.8%

700 to 750 4.4% 7.8% 12.9% 12.6% 8.1%

>750 1.2% 2.8% 6.6% 7.1% 2.9%

Total 4.8% 6.7% 13.0% 13.6% 7.4%

2009-2010

≤700 2.7% 3.7% 4.0% 4.5% 3.2%

700 to 750 0.6% 1.4% 1.8% 2.1% 1.1%

>750 0.2% 0.4% 0.9% 1.1% 0.3%

Total 0.5% 0.9% 1.3% 1.8% 0.8%

2011-3Q13

≤700 0.4% 0.5% 0.4% 0.4% 0.4%

700 to 750 0.1% 0.1% 0.2% 0.2% 0.1%

>750 0.0% 0.0% 0.1% 0.1% 0.0%

Total 0.1% 0.1% 0.1% 0.1% 0.1%

Total 2.1% 3.4% 5.8% 5.4% 3.3%

Sources: Fannie Mae and Urban Institute. Note: Fannie Mae loan level credit data includes loans originated from Q1 1999 to Q3 2013, with performance information on these loans through Q2 2014. Default is defined as more than six months delinquent or disposed of via short sales, third-party sales, deeds-in-lieu of foreclosure, or real estate owned (REO acquisitions).

While the composition of loans originated in 2007 was similar to that of 2004 and earlier vintage years, 2007 loans experienced a much higher default rate due to the sharp drop in home values in the recession. Originations from 2009 and later have pristine credit characteristics and a more favorable home price environment, contributing to very low default rates.

FANNIE MAE DEFAULT RATE SPECIAL FEATURE: LOAN LEVEL GSE CREDIT DATA

36

Balance on 30-year, Fixed-rate, Full-doc, Amortizing Loans

Origination Year

Origination FICO

LTV Total

≤70 70 to 80 80 to 90 >90

1999-2004

≤700 7.8% 16.6% 5.5% 5.7% 35.5%

700 to 750 8.9% 16.0% 3.5% 3.2% 31.5%

>750 13.6% 15.6% 2.3% 1.8% 33.3%

Total 30.3% 48.2% 11.2% 10.6% 100.0%

2005

≤700 10.6% 16.9% 3.3% 3.0% 33.8%

700 to 750 9.3% 15.5% 2.0% 1.7% 28.5%

>750 15.8% 18.9% 1.7% 1.4% 37.7%

Total 35.7% 51.3% 7.0% 6.0% 100.0%

2006

≤700 10.0% 17.3% 3.4% 3.3% 34.0%

700 to 750 8.3% 16.2% 1.9% 1.5% 27.9%

>750 14.3% 20.7% 1.7% 1.4% 38.1%

Total 32.6% 54.2% 7.1% 6.2% 100.0%

2007

≤700 9.1% 15.5% 4.6% 4.9% 34.1%

700 to 750 7.5% 14.4% 2.6% 2.6% 27.0%

>750 14.3% 19.5% 2.5% 2.6% 38.9%

Total 30.8% 49.4% 9.7% 10.1% 100.0%

2008

≤700 7.3% 8.7% 3.1% 2.2% 21.3%

700 to 750 9.1% 13.1% 3.7% 2.5% 28.3%

>750 21.6% 21.5% 4.7% 2.6% 50.4%

Total 38.0% 43.3% 11.5% 7.3% 100.0%

2009-2010

≤700 3.9% 3.2% 0.3% 0.2% 7.7%

700 to 750 9.3% 11.9% 1.7% 0.9% 23.8%

>750 32.4% 31.0% 3.6% 1.4% 68.4%

Total 45.7% 46.1% 5.6% 2.5% 100.0%

2011-2Q13

≤700 3.0% 3.1% 0.6% 0.7% 7.4%

700 to 750 7.3% 10.8% 2.3% 2.7% 23.1%

>750 26.9% 32.0% 5.4% 5.1% 69.5%

Total 37.3% 45.9% 8.2% 8.6% 100.0%

Total 35.0% 47.7% 9.2% 8.0% 100.0%

Sources: Freddie Mac and Urban Institute. Note: Freddie Mac loan level credit data includes loans originated from Q1 1999 to Q2 2013. The percentages are weighted by origination balance.

Since 2008, the composition of loans purchased by Freddie Mac has shifted towards borrowers with higher FICO scores. For example, 69.5 percent of loans originated from 2011 to Q2 2013 were for borrowers with FICO scores above 750, compared to 38.9 percent in 2007 and 33.3 percent from 1999-2004.

FREDDIE MAC COMPOSITION SPECIAL FEATURE: LOAN LEVEL GSE CREDIT DATA

37

Default Rate on 30-year, Fixed-rate, Full-doc, Amortizing Loans

Origination Year

Origination FICO

LTV Total

≤70 70 to 80 80 to 90 >90

1999-2004

≤700 2.5% 3.6% 5.6% 6.1% 4.1%

700 to 750 0.9% 1.4% 2.3% 2.5% 1.5%

>750 0.3% 0.7% 1.2% 1.5% 0.6%

Total 1.0% 1.9% 3.7% 4.2% 2.1%

2005

≤700 10.3% 14.1% 16.6% 18.0% 13.5%

700 to 750 4.9% 8.1% 10.7% 11.1% 7.4%

>750 1.7% 3.9% 6.2% 7.1% 3.2%

Total 5.1% 8.5% 12.4% 13.6% 7.9%

2006

≤700 13.6% 18.1% 21.0% 23.0% 17.6%

700 to 750 7.0% 11.0% 13.3% 13.1% 10.1%

>750 2.4% 5.2% 7.7% 8.3% 4.4%

Total 7.0% 11.1% 15.7% 17.3% 10.4%

2007

≤700 14.2% 19.2% 24.1% 26.4% 19.6%

700 to 750 6.7% 11.7% 15.3% 15.6% 11.0%

>750 2.3% 5.5% 8.7% 9.9% 4.8%

Total 6.9% 11.6% 17.7% 19.3% 11.5%

2008

≤700 10.8% 14.2% 19.7% 18.8% 14.3%

700 to 750 3.9% 7.1% 11.0% 9.7% 6.8%

>750 1.1% 2.8% 5.8% 5.3% 2.5%

Total 3.7% 6.4% 11.2% 10.8% 6.2%

2009-2010

≤700 2.0% 2.9% 3.3% 3.4% 2.5%

700 to 750 0.5% 1.1% 1.4% 1.6% 0.9%

>750 0.1% 0.4% 0.7% 0.8% 0.3%

Total 0.4% 0.8% 1.1% 1.3% 0.6%

2011-2Q13

≤700 0.2% 0.3% 0.2% 0.3% 0.2%

700 to 750 0.1% 0.1% 0.1% 0.1% 0.1%

>750 0.0% 0.0% 0.0% 0.1% 0.0%

Total 0.0% 0.1% 0.1% 0.1% 0.1%

Total 1.9% 3.6% 5.7% 6.3% 3.4%

Sources: Freddie Mae and Urban Institute. Note: Freddie Mac loan level credit data includes loans originated from Q1 1999 to Q2 2013, with performance information on these loans through Q4 2013. Default is defined as six months delinquent or disposed of via short sales, third-party sales, deeds-in-lieu of foreclosure, or real estate owned (REO acquisitions).

While the composition of loans originated in 2007 was similar to that of 2004 and earlier vintage years, 2007 loans experienced a much higher default rate due to the sharp drop in home values in the recession. Originations from 2009 and later have pristine credit characteristics and a more favorable home price environment, contributing to very low default rates.

FREDDIE MAC DEFAULT RATE SPECIAL FEATURE: LOAN LEVEL GSE CREDIT DATA

38

With cleaner books of business and the housing recovery underway, default rates for the GSEs are much lower than they were just a few years ago. For Fannie Mae and Freddie Mac’s 1999-2003 vintages, cumulative defaults total around 2 percent, while cumulate defaults for the 2007 vintage are above 14 percent and 12 percent respectively. For both Fannie Mae and Freddie Mac, cumulative defaults from 2009-10 and 2011-2013 are on pace to fall below pre-2003 levels. For Fannie loans 40 months after origination, the cumulative default rate from 2009-10 and 2011-Q3 2013 are about 0.54 and 0.08 percent, respectively, compared to the cumulative default rate from 1999-2003 of 0.59 percent. For Freddie loans 34 months after origination, the cumulative default rates total 0.34 percent from 2009-10 and 0.05 percent from 2011-Q2 2013, compared to the rate from 1999-2003 of 0.38 percent.

DEFAULT RATE BY VINTAGE SPECIAL FEATURE: LOAN LEVEL GSE CREDIT DATA

0%

2%

4%

6%

8%

10%

12%

14%

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Loan age in years

1999-2003

2004

2005

2006

2007

2008

2009-2010

2011-2013Q2

Sources: Freddie Mac and Urban Institute.

Freddie Mac Cumulative Default Rate by Vintage Year

0%

2%

4%

6%

8%

10%

12%

14%

16%

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Loan age in years

1999-2003

2004

2005

2006

2007

2008

2009-2010

2011-2013Q3

Fannie Mae Cumulative Default Rate by Vintage Year

Sources: Fannie Mae and Urban Institute.

39

These figures show the cumulative percentage of fixed-rate, full documentation, amortizing 30-year loans of a given vintage that Fannie and Freddie have put back to lenders due to rep and warrant violations. Note that the put-backs are generally quite small, with the exception of the 2006-2008 vintages. These numbers exclude loans put back through global settlements, which are not done at the loan level. Moreover, lenders’ attitudes are formed by the total share of put-backs on their books. The database used in this analysis, while very characteristic of new production, excludes many loans that are likely to be put back, including limited documentation loans, non-traditional products (such as interest-only loans), and loans with pool insurance policies.

REPURCHASE RATE BY VINTAGE SPECIAL FEATURE: LOAN LEVEL GSE CREDIT DATA

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

0 1 2 3 4 5 6 7 8 9 10 11 12 13

Loan age in years

1999-2003

2004

2005

2006

2007

2008

2009-2010

2011-2013Q2

Freddie Mac Cumulative Repurchase Rate by Vintage Year

Sources: Freddie Mac and Urban Institute.

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

0 1 2 3 4 5 6 7 8 9 10 11 12 13

Loan age in years

1999-2003

2004

2005

2006

2007

2008

2009-2010

2011-2013Q3

Fannie Mae Cumulative Repurchase Rate by Vintage Year

Sources: Fannie Mae and Urban Institute.

40

Publications Measuring Mortgage Credit Availability Using Ex-Ante Probability of Default Authors: Wei Li and Laurie Goodman Date: November 18, 2014 Measuring Mortgage Credit Accessibility Authors: Wei Li, Laurie Goodman, Ellen Seidman, Jim Parrott, Jun Zhu, and Bing Bai Date: November 3, 2014 Comment Letter on the CFPB’s HMDA mortgage data proposal Authors: Ellen Seidman, Laurie Goodman, Wei Li Jim Parrott, Kathryn L.S. Pettit, Carlos Martin, and Peter Tatian Date: October 22, 2014 Assessing the Proposed Housing Goals Authors: Jim Parrott, Laurie Goodman, Wei Li Ellen Seidman, and Jun Zhu Date: October 22, 2014 A New View of the Housing Boom and Bust Authors: Bing Bai and Taz George Date: September 17, 2014 Charting the Course to a Single Security Authors: Laurie Goodman and Lewis Ranieri Date: September 3, 2014 HARP Significantly Reduced Mortgage Default Rates Author: Jun Zhu Date: September 3, 2014 Putting Mortgage Insurers on Solid Ground Authors: Mark Zandi, Jim Parrott, and Cristian deRitis Date: August 26, 2014

Blog Posts Three trends that signal hard times for renters in 2015 Author: Ellen Seidman Date: November 18, 2014 The 15-year mortgage is not a silver bullet for low-income borrowers Author: Ellen Seidman, Laurie Goodman, and Jun Zhu Date: November 13, 2014 Uncertainty ahead for housing finance reform with Republican surge Author: Zach McDade and Sheryl Pardo Date: November 5, 2014 Why the Government Sponsored Enterprises’ support of low-down payment loans again is no big deal Author: Taz George, Laurie Goodman, and Jun Zhu Date: November 4, 2014 Six reasons to celebrate the Housing Finance Policy Center’s one-year anniversary Author: Laurie Goodman Date: October 24, 2014 The six things we like most in the CFPB’s new mortgage data proposal Author: Ellen Seidman Date: October 20, 2014 Is there a ticking time bomb in the housing market? Author: Maia Woluchem Date: October 16, 2014 Incomplete OIG report overstates the risks of FHFA sunset plan Authors: Laurie Goodman and Jun Zhu Date: October 10, 2014

Upcoming Events

December 17– Data Talk on Senior Housing Visit our events page as more information becomes available.

PUBLICATIONS AND EVENTS RELATED HFPC WORK

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Publications A Realistic Assessment of Housing Finance Reform Authors: Laurie Goodman Date: August 18, 2014 Guarantee Fees- An Art Not a Science Authors: Laurie Goodman, Ellen Seidman, Jim Parrott, and Jun Zhu Date: August 14, 2014 Nonbank Specialty Servicers: What the Big Deal? Author: Pamela Lee Date: August 4, 2014 VA Loans Outperform FHA Loans. Why? And What Can We Learn? Authors: Laurie Goodman, Ellen Seidman, and Jun Zhu Date: July 16, 2014 A Johnson-Crapo Dialogue Authors: Jim Parrott, Ellen Seidman, and Laurie Goodman Date: July 14, 2014 Supplementing the Compare Ratio: An Important Step Toward Opening the Credit Box Author: Laurie Goodman Date: June 9, 2014 Why Long Term GSE Reform Requires Congress Author: Jim Parrott Date: May 22, 2014 HAMP Modifications: Is Reset Risk an Issue? Authors: Laurie Goodman and Jun Zhu Date: May 14, 2014 Johnson Crapo GSE Discussion Draft: A Few Suggestions for Improvement Authors: Laurie Goodman and Ellen Seidman Date: April 15, 2014 National Mortgage Settlement: Lessons Learned Authors: Laurie Goodman and Maia Woluchem Date: April 15, 2014

Blog Posts Five cities with the most racially uneven housing market recoveries Authors: Bing Bai and Taz George Date: October 6, 2014 Ten things I like about the $17 billion BOA settlement Author: Ellen Seidman Date: September 30, 2014 A surprising disparity in the newest mortgage data Authors: Bing Bai and Taz George Date: September 25, 2014 The single-family rental securitization market won’t exceed $20 billion Author: Laurie Goodman Date: September 24th, 2014 Interactive map shows 12 years and more than 100 million new mortgages in 24 seconds Authors: Bing Bai and Taz George Date: September 17th, 2014 The $400 million case for a single GSE security Author: Laurie Goodman Date: September 5, 2014 Data show surprisingly little impact of new mortgage rules Authors: Laurie Goodman, Ellen Seidman, Jim Parrott, and Bing Bai Date: August 21, 2014 Why it’s no easy task to determine what the GSEs should charge for their guarantee Authors: Laurie Goodman, Ellen Seidman, Jim Parrott, and Jun Zhu Date: August 14, 2014 Toward a better Bank of America settlement Author: HFPC Staff Date: August 8, 2014

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Copyright © November 2014. The Urban Institute. All rights reserved. Permission is granted for reproduction of this file, with attribution to the Urban Institute. The Urban Institute is a nonprofit, nonpartisan policy research and educational organization that examines the social, economic, and governance problems facing the nation. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders. The Urban Institute’s Housing Finance Policy Center (HFPC) was launched with generous support at the leadership level from the Citi Foundation and John D. and Catherine T. MacArthur Foundation. Additional support was provided by The Ford Foundation and The Open Society Foundations. Ongoing support for HFPC is also provided by the Housing Finance Council, a group of firms and individuals supporting high-quality independent research that informs evidence-based policy development. Funds raised through the Council provide flexible resources, allowing HFPC to anticipate and respond to emerging policy issues with timely analysis. This funding supports HFPC’s research, outreach and engagement, and general operating activities. Funders do not determine research findings or influence scholars’ conclusions. Scholars are independent and empowered to share their evidence-based views and recommendations shaped by research. The Urban Institute does not take positions on issues.

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