Community Developments: Report on GSEs Credit Risk Transfer Programs
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- Today the Federal Housing Finance Agency (FHFA) issued a progress report on Fannie Mae and Freddie Mac’s credit risk transfer (CRT) programs, providing a comprehensive picture of how the Government Sponsored Enterprises (GSEs) transfer a substantial portion of credit risk to the private sector through a variety of transactions in the single-family market. The report shows that between the start of the CRT programs in 2013 and the end of 2017, the GSEs transferred a portion of credit risk on approximately $2.1 trillion in single-family loans through CRT transactions. It also points out that in 2017, the GSEs transferred risk on $689 billon in single-family loans. (FHFA, March 29)
- The U.S District Court for Northern District of Illinois has ruled that Cook County may pursue federal Fair Housing Act claims against Wells Fargo, to the extent the bank’s alleged predatory lending practices raised the cost of administering and processing a higher number of foreclosures. However, the district court dismissed the county's claims alleging harm from lost property taxes, the need to combat crime and blight, racial segregation and other factors. Cook County now joins Philadelphia, Sacramento and other jurisdictions in seeking legal action against the bank. (HousingWire, March 28) As previously reported in Community Developments, last year the Supreme Court ruled that cities have the right to sue banks over predatory lending practices.
- An analysis by Trulia explores how the 2017 wildfires in Northern California impacted the region’s housing market. The analysis shows that the median home price in Sonoma County rose 8.7 percent to $749,000 in March and the housing inventory fell by 22.2 percent year-over-year. Likewise, the median home price in Napa County soared 28.6 percent to $384,500, while inventory fell 22.2 percent. It also points out that the number of vacant lots in Sonoma County – most left bare by fire – almost doubled to 443 lots, but the number of vacant lots in Napa County remained relatively unchanged. (Trulia, March 28) It is important to note that the analysis is limited in its scope as it includes only Trulia listings, which are not necessarily representative of the general region.
- An article in Next City looks at the New York City Department of Education’s Community Schools Initiative, which piloted a public benefits enrollment program that aims to facilitate low-income students’ access to stable housing, food, health care and other essential services. The program pairs low-achieving public schools in high-poverty neighborhoods with community-based organizations that connect families with affordable housing, after-school support, workforce development and other services. There are currently five public schools that benefit from the pilot program, and the initiative aims to expand it to all 227 of its schools. (Next City, March 28) In 2017, Enterprise released “Creating Equitable Student Outcomes: How Housing and Education Policy are Intertwined,” which looks at how segregation in education and housing prevents children across socioeconomic and racial/ethnic backgrounds from achieving the greatest possible academic success.
- On Friday, April 13, the Harvard Joint Center for Housing Studies (JCHS) is holding a half-day event on “Reframing Housing Development: How Changes in Design, Construction and Regulation Could Reduce the Cost of Housing.” It will feature practitioners, scholars, policymakers, including Enterprise President and CEO Terri Ludwig and Enterprise’s Vice President of Design & Sustainability Katie Swenson. Register here for the event.
In Case You Missed It
- A new study by the National Community Reinvestment Coalition (NCRC), which compares discriminatory maps drawn in the 1930s with current neighborhood income and race data, shows that the economic and racial segregation created by the 1930s Home Owners’ Loan Corporation (HOLC) residential security “redlining” maps persists in many cities. It shows that of the neighborhoods deemed “hazardous” by HOLC maps in the 1930s, 74 percent are currently low-to-moderate income and 64 percent are minority neighborhoods. The study also points out that 91 percent of areas classified as “best” in the HOLC maps are middle-to-upper-income today, and 85 percent of these areas are still predominantly white.
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