BLOG VIEW: Notes From San Diego

Top executives from the government housing agencies, speaking at an industry conference Monday, addressed a slew of topics, ranging from the continued implementation of Making Home Affordable, to filling critical C-level positions, to the financial stability of the Federal Housing Administration.

Transitioning Home Affordable Modification Program trial mods into permanent status remains a top focus for Fannie Mae, CEO Michael J. Williams said at the Mortgage Bankers Association's 96th Annual Convention & Expo in San Diego. Stating that the program has gone from zero to 60 in six months, Williams noted the difficulty servicers have had in completing document collection at the tail end of trial periods.

Per HAMP guidelines, only minimal borrower financial documentation is required at the outset of the 90-day trial period.

While the number of trial plans has so far grown to about 500,000, the number of modifications that are turning into permanent modifications has been considerably less, industry professionals say. The issue, it appears, is not so much a matter of non-payment but, rather, of missing documentation. In recognition of this problem, HAMP administrators issued Supplemental Directive 90-07 last week, which is aimed to simplify doc collection.

Elsewhere in the government-sponsored enterprise world, Freddie Mac CEO Charles E. Haldeman Jr. echoed Williams' sentiment, mentioning that Freddie Mac has added personnel and hired vendors to assist with HAMP efforts.

He also cited the recent hirings of a chief operating officer and chief financial officer. Haldeman has only been in his position since July.

Also pledging commitment to the federal loss mitigation program was David H. Stevens, commissioner of the Federal Housing Administration, although most of his comments were directed toward critics of the insurer's risk management policies.

MBA Chairman-Elect Michael Berman, president and CEO of CWCapital as well as session's moderator, pointedly asked Stevens whether the FHA is turning into the new subprime, as many industry observers have insinuated.

Stevens, relating what he saw in 2007 while in the private sector, said many originators who specialized in subprime product shifted their focus to FHA loans.

"I do believe FHA picked up some tail risk on our books in the "07 and "08 book years, particularly," he said, "and those books are performing in a way that's reflective of that."

– John Clapp, editor, Servicing Management
(Please address any comments or questions to Clapp, at


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