Further, ABA officials discussed why legislative action is needed to preserve access for lenders of all sizes and from all regions of the country.
“These legislative reforms are critical,” Brenda Hughes, senior vice president and director of mortgage and retail lending for First Federal Savings of Twin Falls, Idaho, said, testifying on behalf of ABA. “Congress has an essential role in providing the certainty necessary to ensure long-term stability of the housing finance system.”
Hughes said reform does not need to be radical, but it does need to be comprehensive.
“Legislation need not create an entirely new secondary market structure. In fact, guided by these key principles, we believe that relatively tailored legislation that takes a surgical approach to making necessary alterations to the current system is desirable and can achieve needed comprehensive reform,” Hughes said.
Among the principles, Hughes explained that the government-sponsored enterprises, such as Fannie and Freddie, should be confined to a secondary market role and should agree to support all segments of the primary market.
Hughes emphasized the need to act quickly on legislative reforms so that past abuses are not repeated.
“Congress should not defer action any longer,” Hughes said. “Nine years of conservatorship is more than enough.”