Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

"That was good for a $5.85 trillion increase, or 4.3% from the first quarter. Looking back to a year ago, when the nation was in the early days of the Covid-19 pandemic, the net worth total represents a 19.6% increase.

A large chunk of the new wealth came from stocks, which accounted for $3.5 trillion of the gain, while real estate appreciation was responsible for $1.2 trillion.

However, along with that increase came a big surge in debt.

Consumers debt totaled $17.3 trillion as of June 30, a quarterly gain of 7.9%. Consumer credit grew at an annual pace of 8.6%, while mortgage debt was up 8%."

https://www.cnbc.com/amp/2021/09/23/household-net-worth-rises-above-141-trillion-but-debt-up-sharply-as-well.html

https://www.cnbc.com/amp/2021/09/23/mortgage-market-is-unprepared-for-climate-risk-says-industry-report.html

"There are numerous stakeholders in housing finance, including consumers, landlords, homebuilders, appraisers, mortgage originators and servicers, insurance companies, mortgage investors, government agencies, and the government-sponsored enterprises that issue mortgages (Fannie Mae and Freddie Mac). That means climate change will send significant pressure down a long financial line."

"Not only is climate change putting more stress on the National Flood Insurance Program, it could increase mortgage default and prepayment risks, trigger adverse selection in the types of loans that are sold to the GSEs, increase the volatility of house prices, and produce significant climate migration, according to the report.

For instance, lenders who securitize their loans with the GSEs could face additional costs for representation and warranty insurance, which covers breach of contracts or warranties in large financial transactions, and higher risk as the GSEs revise their requirements in response to climate change.

More specifically, the GSEs might require lenders to perform additional due diligence to determine the need for flood insurance, and the lag in updating official flood maps may force lenders to incorporate additional sources of information on flood risk. As a result, the GSEs might not be allowed to buy loans on homes with higher flood risks."