​Recursion’s Chief Research Officer Richard Koss published an article in Housing Wire Magazine on agency mortgage forbearance and the capital markets. When the CARES act was originally passed on March 27, 2020, there were notable concerns that these measures would merely postpone an inevitable correction in the housing market once the programs expired. However, home price appreciation came to the rescue. But the mortgage market continues to face the prospect of involuntary buyouts of loans from agency pools. Check out the details at:
https://www.housingwire.com/articles/the-end-of-forbearance-and-the-capital-markets/

On January 19, the Federal Housing Finance Agency (FHFA) issued a Request for Information (RFI) on “Climate and Natural Disaster Risk Management at the Regulated Entities”[1]. This RFI was issued as “A growing body of research is studying the risks that climate change and natural disasters pose to the stability of the economy, the financial system, the national housing finance markets, and FHFA’s regulated entities.” There are two main policy topics in which FHFA is seeking comment:

  1. Identifying and Assessing Climate and Natural Disaster Risk

• This includes the identification of “methodologies, datasets, variables, assumptions, future climate scenarios, and measurement tools are used to measure and monitor climate risk to the national housing finance markets”.​

  2. Enhancing FHFA’s Supervisory and Regulatory Framework

• This includes the question “Are there policies the regulated entities could pursue to mitigate such adverse effects for minority borrowers exposed to climate and natural disaster risk?”

Recursion joined with a consortium of experts in this field, including the Lincoln Institute of Land Policy, the Roosevelt Institute, the Carbon-Free Buildings Program and the Vulnerable Communities Initiative Inc that submitted a comment letter to FHFA Director Calabria on April 19[2].

This letter spelled out a statement of principles that reflect Recursion’s mission of building “Data Democracy”, including:

• Decision making must be data-driven. High-quality data is a prerequisite for any accurate analysis, projection, and decision. This includes not only quantitative statistics but also qualitative data, such as case studies, interviews and lessons learned that capture the meaning and context of information.
• Make data free, transparent, and accessible. Government, Enterprise and FHLBank-produced data are public goods and they create maximized economic benefits when they are open. Equal access to high-quality climate-risk data helps level the playing field for the average consumer and local communities to make better decisions. Determine the specifications for disclosures of loan-level mortgage data (e.g. geography, demographics, underwriting) needed to align with climate-risk data to ensure that the information needed to accomplish climate policy goals is available. Researchers can provide valuable feedback to help maintain the dataset’s quality and improve government’s data management practices.

We are pleased to work with such distinguished colleagues on this important topic.

Recursion has met the criteria set by the M/WBE Program at the New York City Department of Small Business Services to be certified as a Minority Women-Owned Business Enterprise (M/WBE). 

​Debtwire quotes Recursion data showing a large uptick in LoanDepot’s Ginnie Mae portfolio over the month of February.  In early reporting for March 2021, LoanDepot’s involuntary prepayment speed, or 1-month CDR, reached 20.6 percent.

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​Recursion Co recently provided commentary in response to a Request for Information (RFI) regarding appraisal policies, practices, and processes. We comment on how big data technology can be applied to monitor the performance of loans where appraisals have been waived compared to a benchmark of eligible loans where traditional appraisals have been utilized. In addition, we provide a framework for analyzing how these tools can address issues such as the impact of new processes on fairness and the safety and soundness of the system of mortgage finance from such topics as environmental vulnerability.

Quoting Recursion Data, Debtwire reported that Non-Bank EBOs fell back in February, even though the level is still multiple times greater than the average recorded across most months in 2020.
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The analysis was performed using Recursion’s flagship product: Cohort Analyzer.