2017: The Year in Review
December 7, 2017
This year was an eventful one. Home construction and sales got off to a good start, but stalled by the mid-year point. Strong demand, low mortgage rates and a lack of for-sale inventory contributed to rising home prices. Meanwhile, the market shifted from refinances to purchases. But despite challenges and changes, 2017 was the housing market’s best year in a decade.
Perhaps the most newsworthy − and dramatic − events came in late summer and early fall, when hurricanes hit Texas, Florida, Puerto Rico and other territories. Then, wildfires gripped California and the Pacific Northwest. Freddie Mac took action to ensure that borrowers received the mortgage assistance they needed to mitigate the impact.
We issued several Single-Family Seller/Servicer Guide Bulletins in quick succession that announced temporary changes to our requirements in all areas designated as FEMA disaster areas. We also updated our Natural Disaster Relief web page to reflect this guidance.
The year saw a few milestones and updates across Freddie Mac, from enhancements and additions to Loan Advisor Suite® − our innovative suite of tools for the loan manufacturing process − to ongoing initiatives that impact how you do business with us. As we wind down December, let’s look at highlights from the year:
- Uniform Closing Data (UCD) Mandate.The UCD mandate became a reality on September 25. Developed by the GSEs at the direction of our regulator, the Federal Housing Finance Agency (FHFA), this common industry dataset is enabling the electronic communication of information on the Consumer Financial Protection Bureau’s (CFPB) Closing Disclosure. (Although the mandate’s deadline is past, we’re providing a six-month relief period from embedding the Closing Disclosure PDF within the UCD XML file.)
- Duty to Serve. Freddie Mac's draft Duty to Serve Underserved Markets plan was published in May, outlining how we intend to strengthen our efforts to help more very low-, low- and moderate-income families get into housing in three historically underserved markets: manufactured housing, rural housing and affordable housing preservation. We’re proud to be taking this leadership role in solving persistent housing problems.
- Record Low SDQ Rate. Thanks to their diligence in implementing updated foreclosure prevention policies and using Freddie Mac's flexible loss mitigation toolkit, our Servicers helped us achieve a single-family serious delinquency (SDQ) rate of below one percent – the lowest it's been in almost a decade.
- Loan Advisor Suite®. Big things happened this year for our risk reduction toolbox:
- For starters, Freddie Mac was cited as a 2017 HousingWire Tech 100 Award Winner, less than a year after the Suite was launched in July 2016. Of the Tech 100 winners, HousingWire Senior Financial Reporter Ben Lane said, "These companies aren’t just taking part in the housing industry’s technological revolution; they’re leading it." Freddie Mac is proud to be a tech leader.
- We added Correspondent Assignment Center as a new service to simplify data sharing between correspondent lenders and their aggregators. With this service, correspondents get greater efficiency, while aggregators get greater insight into whether loans meet our requirements − before they buy them.
- We announced automated collateral evaluation (ACE), an alternative to traditional appraisals that helps you get your borrowers to closing faster, while saving them money. In September, we expanded ACE to include both purchases and no cash-out refinances for certain Loan Product Advisor® mortgages.
- In June, Quality Control Information Manager (QCIM), our tool for managing the post-funding quality control and remedy process, was renamed Quality Control AdvisorSM and joined Loan Advisor Suite.
- Also in June, the Selling System began displaying cash payup information for specified loan attributes, providing additional opportunities to improve your best execution when selling loans for cash. The big Selling System® news is that it will become Loan Selling Advisor® later this month, with a brand-new interface (but the same functionality users expect).
- Investor Reporting Change Initiative (IRCI). In August of 2016, we announced the IRCI to bring our Single-Family investor reporting requirements closer to an industry standard and update our remittance cycles by May 2019. Throughout 2017, we rolled out testing, business requirements and other documentation intended to help you prepare for a simpler and more flexible investor reporting processes.
- FreddieMacCONNECT. Our 2nd annual conference was held September 17-19 at the Renaissance Baltimore Harborplace Hotel in Baltimore, MD. If you attended, you heard a fascinating keynote from Luke Williams, author and NYU Stern School of Business professor, visited exciting exhibits and sat in on engaging sessions, like our Chief Economist’s look at the Borrower of the FutureSM. We’re gearing up for next year in Chicago, September 23-25, 2018, so join Freddie Mac leaders and your industry peers and mark your calendar.
- Single Security. In March, FHFA announced the second quarter of 2019 as the implementation timeframe for Release 2 of the Common Securitization Platform and the launch of the Single Security. As you make plans for 2018, you’re encouraged to keep the Single Security on your radar and take advantage of various resources to prepare.
This was the best year for the mortgage industry in over 10 years, and the economic environment generally remains favorable for housing and mortgage markets as we head into 2018. We’re forecasting a gradual pick-up in housing construction, which will help supply more homes to inventory-starved markets.
We’re looking forward to a new year, and that optimism is fueled by your valued business. Thank you for helping to make it a good year.