The Mortgage Bankers Association (MBA) commended the U.S. Department of the Treasury on its plan to reform the housing finance system.
The Treasury Housing Reform Plan seeks to limit the role for the federal government in the housing finance system as well as protect taxpayers against future bailouts, preserve the 30-year fixed-rate mortgage, and facilitate homeownership. The Treasury Department developed the plan with input from a range of stakeholders including affordable housing advocates; broker-dealers; investors; mortgage lenders, servicers, and insurers; think tanks; trade associations; and other interested parties. Treasury also consulted with the Federal Housing Finance Agency, the Department of Housing and Urban Development, and other government agencies.
During the financial crisis of 2008, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) suffered significant losses and received more than $190 billion from the Treasury Department. On March 27, President Donald Trump directed the Treasury Secretary to develop a plan for administrative and legislative reforms to address the issues with the housing finance system.
The MBA is on board with the Treasury’s plan for housing finance reform, which includes an explicit government guarantee on qualified mortgage-backed securities for single-family and multifamily loans, increased competition and consumer choice via potential additional guarantors, and a level playing field for lenders of all sizes and business models.
“The reports recognize the need to better coordinate the roles of FHA and the GSEs. Such coordination must preserve affordable financing options for a wide range of borrowers and reflect the vital role FHA plays in the larger housing finance system,” Robert Broeksmit, president and CEO of the Mortgage Bankers Association, said. “MBA looks forward to working with the Administration, Congress, and regulators as they address the large number of issues identified in the reports, including the appropriate role the GSEs play in the single-family and multifamily markets. Housing is a critical piece of the American economy, and reform efforts must ensure the uninterrupted flow of affordable mortgage credit for qualified borrowers through all economic cycles and in all parts of the country.”