| MPF® Advisory Council Identifies Areas of Focus |
The newly created MPF Advisory Council met for the first time in April and formed subcommittees that will explore the challenges of the changing house market. Together, the 18 PFIs (three from each of the six participating Federal Home Loan Banks) will make recommendations to the MPF Program for the benefit of PFIs across the country. Read the list of the Advisory Council members.
The council divided into three subcommittees with an FHLB representative serving as a coach; the council will meet again in August to review their progress. The three subcommittees are: - Product Development and Expansion. This subcommittee, coached by Paul Pouliot of the FHLB Boston, will address ARMs and high balance loans as well as prepayment penalties.
- Industry Issues and Challenges. Jeff Acquafondata, FHLB Pittsburgh, will coach this subcommittee, which will study risk-based capital requirements and mortgage servicing rights (MSR) valuation.
- MPF Program Enhancements. Brad Meader from the FHLB Des Moines will coach this subcommittee, which will discuss issues such as eSignatures and automating processes.
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Viewpoint: Real Estate Outlook and Risks |
Jed Smith, Managing Director, Quantitative Research, National Association of Realtors®, spoke at the MPF Program Advisory Council’s first meeting on April 18, 2012. Below are five takeaways from his presentation, “The Economy: Real Estate Outlook and Risks.” - Jed expects median home prices to stabilize this year, and, depending on where you live, some prices will be heading up. Home inventories are decreasing, he said, and then price becomes a matter of supply and demand.
- Talking about the “shadow inventory,” Jed said, “We haven’t seen it. Any harm has already been done to the market. We’ll have foreclosures and short sales for the next two to four years, but that’s not going to plague us.”
- Distressed sales account for 30% to 40% of transactions, he reported. “The market is getting cleared.”
- “Affordability is very high,” Jed said, but “interest rates are only low if you can get the mortgage.”
- The “millennial generation” is large and has a favorable attitude toward housing, he said. “They are apartment dwellers, but committed to buying a house,” Jed continued. “They have massive student loans that are slowing them down” and some are still living with their parents.
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