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Residential Department: From The Editor: July 2019


From The Editor

The future of the GSEs is back on the front burner

r_2019-07_FTEThe question of what will happen to Fannie Mae and Freddie Mac has been simmering for years. Now, the heat feels like it has reached the boiling point.

The companies that own or guarantee about half of all home loans in the country were put into government conservatorship after the housing crisis in 2008. Mark Calabria, the new head of the Federal Housing Finance Agency, is putting a priority on releasing the government-sponsored enterprises (GSEs) from federal control.

He took his case to Congress and the media this spring. And he has signaled a willingness to bypass Congress if need be. Calabria, the former chief economist for Vice President Mike Pence, argues that both companies need sufficient capital to withstand another financial crisis in order to be released from conservatorship.

He told mortgage bankers this past May that a housing-finance reform plan would be finished by this fall, with a plan to raise capital for Fannie and Freddie to begin in January 2020. How that will be accomplished remains to be seen.

While these big-picture issues play out, mortgage professionals are sharing their insights and experiences of what they’re seeing on the ground in this edition of Scotsman Guide, which focuses on government loans and the GSEs.

In our cover story, Susan Graham of Financial Industry Computer Systems Inc. writes about the overhaul of the uniform home-loan application form used by Fannie and Freddie. She notes on Page 37 that there’s a corresponding effort to make applications more accessible to the growing number of people who speak English on a limited basis.

On Page 55, Clever Real Estate’s Ben Mizes writes that millennials are already a dominant force in the housing market, but more are coming. He argues that originators need to understand the best ways to market to this generation.

On Page 62, RPM Mortgage’s Dick Lepre takes a look at whether years of climbing home prices are pushing the market into bubble territory. He makes the case that loosening credit standards should be a concern for anyone with a vested interest in the mortgage industry.

Many mortgage originators are mandated to obtain a surety bond to protect their clients in case of failure. On Page 68, Eric Weisbrot of JW Surety Bonds covers the 1-2-3s of what originators need to know about this tool.

NewDay USA’s Thomas C. Lynch writes about home loans through the U.S. Department of Veterans Affairs (VA). On Page 81, Lynch points out why veterans make attractive clients and why originators should consider learning more about the VA loan option.

On Page 100, Churchill Mortgage’s Eric Webb discusses the ways that originators and underwriters can collaborate to best serve clients and close more loans. He also discusses strategies that lenders can use to make the mortgage process more efficient.

Bill Packer of American Financial Resources Inc. writes on Page 119 about the challenging home-purchase market. He suggests originators need to be skilled in a wide range of mortgage options to be successful. Enjoy these and other stories in this edition of Scotsman Guide.


Jim Davis is editor of Scotsman Guide Residential Edition. Reach him at (800) 297-6030 or

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