“Today’s hearing made significant progress on the path to housing finance reform. While there was plenty of disagreement, there was also important alignment around essential issues of a bipartisan deal that has eluded Congress in the past. Treasury Secretary Mnuchin made clear that housing finance reform must maintain access to the 30-year fixed rate mortgage; ensure enough private capital is in place to protect taxpayers; seek to provide the stability and liquidity to withstand future financial crises; and improve transparency and standardization that ensures that community banks and credit unions will have equal access to the benefits of the secondary mortgage market. These principles have been explicitly embraced by both Chairwoman Waters and Chairman Crapo.”
“The opportunity for Congress to find the bipartisan path forward is to work with the administration on the parts of their plan they like, while holding a clear line against those that they oppose, many of which the administration essentially dismissed during the Senate hearing. One example is housing goals and the Duty to Serve. The Treasury report states that ‘the GSEs’ statutory affordable housing goals should be replaced with… a periodic assessment from guarantors that Congress would make available through an appropriation to administer on-budget affordable housing programs.’ While the report says that the goals were a contributing factor to the GSEs’ risk taking and losses in the lead up to the financial crisis, Secretary Mnuchin was definitive that ‘we very much support the Duty to Serve and affordable housing goals.’ While he suggested they could be more effective, a position held by many progressives, he agreed that any change should only happen with bipartisan congressional action.”
“The most important thing the hearing accomplished is that it has reinvigorated the debate on housing finance reform after 11 years of conservatorship and established a path forward that requires both Congress and the administration to get right. Housing finance reform does not require the invention of an entirely new mortgage finance system. Notably, at the hearing’s conclusion, Senator Brown offered to have Senate and Treasury staff begin discussing next steps. That is a major development and demonstrates Senator Brown’s good faith. Treasury should immediately take steps to respond to this offer.”
About NHC: The National Housing Conference has been defending the American Home since 1931. Everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.