Several steps can be taken can be taken to reform and strengthen the U.S. housing finance system even in the absence of federal legislation, according to a report.

It recommends measures to strengthen the housing finance system, including greater transparency into Federal Housing Finance Agency oversight of government sponsored enterprise activities, and more risk-based pricing combined with explicit affordable housing subsidies, according to "A Blueprint for Administrative Reform of the Housing Finance System,” from the Milken Institute Center for Financial Markets.

Further, it suggests a government sponsored enterprise rule that supports a housing finance system driven by private capital that can survive future downturns and maintain liquidity for creditworthy borrowers throughout the economic cycle. Also, among its recommendations are actions for the Consumer Financial Protection Bureau to take regarding the ability to repay-qualified mortgage rule and generating innovation while maintaining consumer protection.

The Federal Housing Finance Agency, Treasury Department, CFPB and others can take steps, even in the absence of legislation to reform the housing finance landscape and reduce barriers to achieving the bipartisan legislation required to finalize the post-crisis housing finance reform effort.

Until legislation is passed, the conservatorship of Fannie Mae and Freddie Mac should continue until Congress passes legislation to resolve critical GSE charter flaws and establish a safer, more effective system.

In addition, the following reforms are also included in the report:

• Expanding the functionality of the Common Securitization Platform and opening access to key GSE technologies to future competitors.
• Reducing or eliminating the GSEs' presence in markets that are adequately served by the private sector, such as second-home financing and most cash-out refinancing.
• Providing Ginnie Mae and FHA with resources to improve technology and operations.
• Making better use of the Federal Housing Finance Oversight Board to strengthen coordination among components of the housing finance ecosystem.

"These recommendations are drawn from deep expertise in our housing finance policy team, who bring decades of government and industry experience along with a commitment to crafting bipartisan solutions by focusing on substantive policy goals and the tools available to achieve them," said Michael Piwowar, executive director of the institute and a former commissioner and acting chairman of the Securities and Exchange Commission.

 Name: Steve Johnson

Title:  President

Company: Security National Mortgage Corp.

In the Mortgage Business Since: 1982

Number of Employees He Manages: 825

Security National Mortgage Corp. is an independent non-bank mortgage company that does business in 45 states, with branches in 23 of them. The majority of its volume, 80%-85%, is generated from five states: Utah, Texas, Nevada, Arizona and Florida. Security National originated $2.3 billion in loans during 2018.

How’d did you get into the business?

I came out of graduate school with a degree in international finance from the American Graduate School of International Management, now part of the University of Arizona. But I couldn’t get a job in that field. I knew nothing about the mortgage business, but the opportunity to be a loan originator came up. I asked, “Does it have health insurance?” It did, and I accepted the position.

 What are the characteristics of leadership that you think are most important?

It starts with having the right people. Being careful on who joins the team, but without looking for a cookie cutter type of person. There has to be confidence in each other—and we need to pull together with the same direction and goals. If you do that, despite all the egos and desires, we can move in the same direction. The key to attaining common goals, such as volume and financial stats, is communication.

 How do you see the difference between a manager and a leader?

That’s an interesting question. A clinical definition is that for people to follow you, you have to have a leader. A manager can chart X’s and O’s, but a manager can broadcast that out to the troops. You have to have both of these skills. And recognize weak spots and work to overcome them. In this position, you are obligated to perform as expected. So, you have to constantly be trying to improve.

 Who has inspired you during your career?

There have been so many that have inspired me, including my current boss, who is CEO of our parent company and the mortgage company. The trait is very hard work. These people that I have been privileged to work with now, and in the past, have been willing to do what it takes to be successful, and that’s a lot of hard work. That’s very important.

What do you look for in mentor?

I’m not sure I picked them. I have had really good bosses over the years. My first boss was a great example of someone that worked hard, was ethical and honest. She taught me to pay attention to details, to dot the I’s and cross the T’s. That was very important when I moved into secondary marketing.

Also, I've served as a mentor to people just getting started in the business. They've done well and advanced to executive positions. I've tried to pass on to them the same attributes I learned from my bosses.

The year ended with owner and appraiser perceptions of home values slightly moving in different directions, although the difference remains less than half a percent nationally.

Appraisal values were an average of 0.45 percent lower than homeowners expected in December, according to the National Quicken Loans Home Price Perception Index. This is compared to November, when there was just a 0.36 difference between the two data points.

Despite the dip in perception, appraisal values themselves rose in December at a faster pace than they did in November. The National Quicken Loans Home Value Index reported a 0.79 percent monthly increase in the average appraisal value. The national index also showed the average appraisal jumped 5.15 percent year-over-year.

Home Price Perception Index is a measure of homeowners' opinion of home values, continued to show a small difference between owners' and appraisers' opinions on a national level, but the appraisals in the vast majority of metro areas were higher than the owner expected in December. The index compares the estimate that the homeowner supplies on a refinance mortgage application to the appraisal that is performed later in the mortgage process.

Homeowners in Boston, for example, saw appraisals coming back an average of 2.98 percent higher than what the homeowners expected. Based on the area's median home value, that is an average of about $15,000 in extra equity the owners don't realize they had.

"Many consumers might not be watching their local housing market as closely as appraisers who are reviewing home sales every day, leading owners to incorrectly estimate their home's value," said Bill Banfield, executive vice president of capital markets for Quicken Loans. "There are many ways a homeowner can make their equity work for them if they have a realistic estimate of their home's value. Tapping into home equity to consolidate high-interest debt or make home improvements are very popular options right now."

Home Value Index, a measure of changes in the value of home purchases and mortgage refinances and is based exclusively on appraisal data, reported increased appraisal values across the U.S. The National HVI showed that home values rose in December 0.79 percent compared with November. The annual growth is even stronger, with the average appraisal rising 5.15 percent over last year's level.

Another sign of the housing market's health is that all four regions measured by the study reported modest growth on the monthly and annual measures. The appraisal values ranged from 4.41 percent annual growth in the Northeast to a 5.98 percent year-over-year increase in the West.

"Any consumer who has read recent news about the housing market and has the impression that it is slowing to a halt should see that the HVI proves that this could not be farther from the truth," said Banfield. "Home value growth is now at a more normal, sustainable clip--keeping pace with inflation and wage growth more than we have seen in the past few years."