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Len Kiefer

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68
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2019-01-11
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2019-01-11
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1
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podcast

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  1. “Yeah, I mean, it's just we have thousands of seller services who deliver loans to us. I mean, it's just a huge operation on a very, very large scale, which is some of the power of sort of the securitization and the ability to sort of tap global capital markets, which ultimately leads to benefits for borrowers, the 30-year fixed rate mortgage, and lower rates, which are going to, I think, be a continued focus given sort of the markets has seen interest rates drift higher over the last year.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “But, you know, there's a lot of zeros. And it's one in five, roughly one in five home loans in the country. I mean, it's just a huge scale. But a lot of sort of the...”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “That is a lot of money. I mean, part of the thing that was interesting coming to Freddie Mac from an academic is the scale. Freddie Mac has, you know, I think just over $2 trillion in our guarantee portfolio. That's mortgages that are in our securities.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Real focus and direction there that we certainly had, but it wasn't at the top. And that, I think, really brought itself down and really got folks really focusing on how can we be efficient, how can we help make this Freddie Mac better while we are continuing to evolve, as I mentioned, we talked about the credit risk transfer and other innovative things that are going on as the market sort of continues to change.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Yeah, so I think, you know, starting back at the tenure of our current CEO, Don Leighton, when he had come in around 2011 or so, I think he really brought a real focus on culture of the institution of Freddie Mac and how we could have a commercial-minded focus. He had come from Chase and JP Morgan and eBay. And so he brought a real commercial-mindedness to the enterprise and a real focus on being an efficient organization, having organization that was focused on customer with an eye to potentially in some future state, perhaps being more competitive than maybe we had been in the past. And so that really took some time to really get that going, but I've really seen that go through the organization and really think about it in my work, how I try to bring the economics to either help our business partners internally or help folks externally and really have that kind of, I think, a real customer focus, which was, I think,”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Analyze it. So when they look at new originations, you can use that historical data to get a sense for what credit losses could look like in the future when they're deciding to bid for these securities or insurance contracts.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Well, they get some yield in that, right? So they have to pay for that. So there's auctions, those bonds are auctioned off, and so there's the market sort of, in some sense, determines what the price of that credit risk is, which is very new. And so that's where sort of, I think Freddie Mac was very much a leader in trying to get this market started, because initially folks really didn't have a sense, well, how does credit risk look? What are the losses maybe going to look like? And so back early 2010s, we started releasing a lot of information to investors, information on mortgage historical performance, data that was historically kept within the enterprise, but actually we put it out publicly. It's actually available on the website. You go to FreddieMac.com right now. You can go get a loan level file that gives you information on not only the loans that were originated, but also their subsequent performance and even information on their losses. And that's very important for the marketplace so that they can then use that data, build models.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Government sponsored entities. Yeah, by Freddy or Fanny. And so we would guarantee that the credit risk, so in the event of a default, if the borrower default is on their home, the investors would get paid back the principal. And so then the credit losses would be taken by the entities. Since then, we've begun to realize that maybe holding all that credit risk in one single gigantic or two single gigantic organizations may not be the most efficient way to structure it. And so the idea was, well, how can we divert, sell that to a diversified marketplace, just like with interest rate risk on the mortgage bonds? Could we sell the credit risk to investors? Could they understand sort of, okay, what are the likelihood of default? How would I understand that risk? Once they got a handle on that risk, they may be willing to then purchase these credit risk transfer securities or reinsurance contracts where in the event of a default, it's not only Freddie Mac or Fannie Mae that has to help make up the loss, it's also these other investors.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Yeah, so this is very new. I mean, there were attempts, I think, to start this market going in the past, even in the early 2000s, but it really got started, I think, on the multifamily side in 2009, which would risk sharing essentially between Freddie Mac and investors. And then in the single family side around 2012 or 2013. And what this is, is traditionally under that model that you described where Freddie Mac would buy the loans and then securitize them. The investors of those securities were really just buying interest rate risk. The credit risk was guaranteed.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “That's right, I joined the company in October 2009, which was about a year after the conservatorship, which was in 2008, about a decade ago.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Important for how the mortgage finance system has changed over the last decade is that we have really begun to be active in a credit transfer market where Tredi Mac actually takes the credit risk associated with the mortgages, which traditionally we would hold, and distributing it through investors either through senior sub-securitizations or through reinsurance market. And so that sort of, those transactions, both on a single and multifamily side, have really helped to sort of disperse the credit risk and sort of get it to a broader market, which can ultimately help to bring costs down for taxpayers and also for borrowers.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Yeah, so I think what's really important is sort of the interface between Freddie Mackin, the primary market or the originators, the institutions that are actually making the loans. Because we at Freddie or Fannie Mae don't actually originate loans. We are active in the secondary market, but we're heavily involved with the originators in terms of sort of the types of products that are acceptable, that we will securitize and will fund. And so that sort of interaction sort of is very much sort of at the sort of very beginning stages, even at the sort of underwriting and sort of the processing. There's a large part of Freddie Mac who deals with loan operations. How do we take on loans? How do we help the originators underwrite their loans through automated underwriting systems often? And then those loans get originated, and then we, of course, then put them into securitizations, which we've been doing for quite some time. And what's been relatively new that folks that aren't active in sort of this space might not recognize, but it was actually, I think, fundamentally.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “In a slightly different way to get a new insight is challenging. And so I think data visualization and building graphs and interesting charts is a way to do it. And the great news is that there's a whole ton of people out there who are active. They share things either through blogs or social media on Twitter that give me a lot of ideas and in the world we're in today a lot of the code that they use to create those charts are open source so it's relatively easy to pick that”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Yeah, so I actually create a lot of them myself. You know, I'm a big fan of data visualization. I asked earlier about the transition from an academic world to an industry world and one of the key fundamental differences between an academic approach to economics and a more industry-focused approach is the really importance of being salient, being clear, and having a crisp communication. And data visualization, which I think is really undergoing a renaissance with all the computing technology, all the great ideas that people have has really, I think, shifted sort of where the dialogue can be in terms of information design, how you present information. And so thinking about new, interesting ways to present the same data, because I've been working on our mortgage rate survey for close on five years now, over five years. We have a weekly mortgage rate survey. Every week we have a mortgage rate. So trying to come up with what's a new perspective, what's interesting to see about that, what's a different way, how can I turn this data and try to look at it.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Yeah, actually it was the Freddie Mac communications folks who actually encouraged me to actually get started on Twitter because we view it as a great way to get short insights out. We do a lot of analysis data analysis. A lot of that tends to get siloed within the organization. And since we're already producing a lot of that information, a lot of that is based on public data. I think those observations, which are already things we did in sort of other research avenues, I think where Twitter was a great platform to be able to share that insights and information. And so they've been supportive of me engaging in that and trying to get a conversation going, share our insights, share our perspective, share some of the things that we're seeing in the housing market, because I think within Friday Mac, we have an interesting perspective. We have a lot of data, a lot of really smart people, a lot of insights. And so distilling some of that down into the public conversation around the housing and mortgage market and the economy is, I think, well within sort of my role in the company.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Yeah, so it was an interesting transition. I went to Ohio State, and after I graduated, I actually went to West Texas, Texas Tech University, and was there as a tenure track professor in their program. My wife is also an economist. We met at Ohio State, and she took a job in DC, and I decided that I would follow her. There's better job opportunities in the DC metro than West Texas for economists. And so I followed her to the DC area and then eventually ended up at Freddie Mac.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “And then a second hat I wear is to help folks inside the company, so at Freddie Mac, folks that are really thinking about sort of the mortgage market, the housing market in the United States very carefully give them sort of an economics perspective to how to make sense of the trends, what's happening, and how the market may be headed in the future.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Yeah, Barry, that's really tough to do. That's more of a mission statement, how I try to organize myself, how my public life, what I'm trying to do. And I think we have some success doing that. There's really sort of two areas where I focus on to try to help people understand what's going on. Part of my role at Freddie Mac is to help be a company spokesperson to go out and talk to our various business partners. We have events where we bring together real estate agents, loan officers, others. And those folks are often very active in the marketplace, but they want to hear from an economist to get a sense of sort of a bigger, broader perspective on what's going on, what's happening in the global macroeconomy. And so helping those folks understand, given our perspective from what we do in our research and what we find, I think, is part of the way we help do that.”

    2019-01-11 · Masters in Business · Len Kiefer Discusses the Housing and Mortgage Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source