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The Three Phases In Property Survey Law

1. The Homeowner Phase

In this part of the survey, homeowners receive questionnaires that ask about their purchase of the property, characteristics of the property, and information about the mortgages on their property. The homeowner phase of the RFS gathers the information that policymakers and mortgage lenders need to make the decisions that influence borrowers' ability to get future loans at affordable costs. Historically, when data indicate a low risk for lending, loans and opportunities for home ownership are more widely available. Additionally, comprehensive RFS data may be used by mortgage lenders to assess whether to lower interest rates.

2. The Rental Property Owner Phase

In this phase, owners of rental properties get questionnaires that ask about their purchase of the property, operating information for the property, and data on the financing of the property. Similar to the homeowner phase, the rental property owner phase gathers the information that mortgage lenders need when deciding to extend loans to rental property owners at competitive market rates.

The RFS collects information about Federal, state, and local government programs in which owner participation may improve the profitability of a rental property. The survey also collects data on housing for the elderly (such as assisted living and retirement housing), multifamily properties, and other market niches. Furthermore, the RFS will collect data on operating expenses and capital improvements for multifamily housing. This information can be used for competitive analysis among rental property owners.

3. The Lender Phase

The lender phase of the RFS gathers data on residential properties that are mortgaged. The National Association of Realtors' Home Buying and Selling Report revealed that approximately 96 percent of home buyers in 1991 financed their purchase, with 3 percent relying on two or more mortgages.

Selected mortgage lenders will receive questionnaires in the summer of 2001, asking for detailed mortgage information. The lender phase will cover topics of long-time interest to the industry (e.g., mortgage insurance status, amount of outstanding mortgage debt, terms of the mortgage, current status of mortgage payments, and extent and characteristics of certain liens).

Much of the data collected from lenders in the RFS are not found in any other surveys, nor are they collectively measured among Federal Reserve Flow of

Funds data. According to Frank Nothaft of Freddie Mac, "By capturing data on loan servicing and holdings by small investor groups, the RFS provides the most comprehensive measure of outstanding mortgage debt, necessary to measure the growth in mortgage credit over time."

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