According to the Austin American- Statesman, half the construction workers in Texas were undocumented as recently as 2013. Fourth, some communities have substantially increased new construction costs. Impact fees in Fort Mill, SC were set at $2,500 in 1996 according to The Herald, the local paper. Now, after 22 years, the fee will be raised to $18,158 for a new home. Can the local market absorb higher new home prices or will the result be less construction? If new homes are suddenly more expensive what will happen to existing home prices? Despite demand, new construction is actually slowing. As of June, according to the NAHB, builders are on pace to build 1.17 million new housing units in the next 12 months. “Within this overall number,” said the Association, “single-family starts fell 9.1 percent to 858,000 units. Meanwhile,

the multifamily sector -- which includes apartment buildings and condos — dropped 19.8 percent to 315,000.” Riskier mortgages? Could we have a repeat of the 2007 recession, an event brought on by massive mortgage failures? A look at recent financing trends suggests that the mortgage marketplace has become strongly risk-averse and that toxic loans have largely been washed from the system. of mortgage investors and insurers if loans go bad. Is there anything in the mortgage file which shows lender negligence? Borrowers may complain about picky mortgage applications, but the result is stronger loan applicants, fewer foreclosures and a better ability to withstand an economic downturn. With passage of the ability-to-repay rule, originators are now the first target

loans, and lender interest is plainly increasing. Should we be worried about large-scale subprime failures? The reality is that there just aren’t that many of them. The FHA program will insure borrowers with credit scores down to 500, but getting such mortgages today is simply improbable. Just before the mortgage meltdown, the FHA was a major backer of nonprime financing. In 2007, 21.4 percent of all forward loans insured under the FHA program had credit scores between 579 and 500. In 2017 that market segment accounts for just 0.4 percent of all FHA approvals. Higher-risk nonprime loans are surely out there (see “The Return of Risk: Subprime Sneaking Back” in the July 2018 Housing News Report), but most appear to be in private hands. Freddie Mac, with $95.3 billion in assets, says that at the end of March it had securitized roughly $1 billion

But what about nonprime mortgage financing? There is demand for such



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