Housing policy changes discussed in Congress and by the Obama administration in recent months have covered a broad spectrum of approaches, including proposals to almost completely privatize the housing finance system and using a system of reinsurance to backstop private mortgage guarantors to a targeted range of mortgages. Senate Banking Committee Chairman Tim Johnson, D-S.D., recently stated he will be working closely in the coming weeks with ranking member Mike Crapo, R-Idaho, in developing a bipartisan comprehensive reform bill. Both parties appear to be sensitive to the fact that a fully privatized mortgage financing system could place homeownership out of reach for many middle income families and rural communities.
House Financial Services Committee Chairman Jeb Hensarling, R-Texas, continues to place housing finance reforms as a top priority of his committee and the chairman has had several hearings on the topic. In March, Hensarling and FHFA acting director Ed DeMarco agreed the time for Congress to develop a plan for the future of the U.S. mortgage market has arrived. Hensarling would like to see GSE’s Fannie Mae and Freddie Mac shut down.
There is broad consensus that comprehensive housing finance reform will not arrive quickly or easily. Legislation was recently introduced in the House aimed at strengthening the Federal Housing Administration (FHA) and to help ensure the agency's long-term solvency. A separate Senate bill, the Jumpstart GSE Reform Act, would prohibit any increase in the guarantee fees charged by Fannie Mae and Freddie Mac from offsetting other government spending and prohibit the sale of preferred GSE shares without congressional approval and structural housing finance reform. MCUL and CUNA continue to communicate that any changes to secondary mortgage market structure must allow credit unions unrestricted access to the secondary market. Click here to access the House Financial Service Committee's archived hearing on GSE reform with FHFA director DeMarco. Click here to access chairman Johnson’s recent statement on housing finance reform.