Califonia Rep. Gary Miller (R-CA) has announced plans to introduce a bill to reform the nation’s mortgage finance system during a policy summit convened by the National Housing Conference (NHC). Approximately 200 people attended the event at the Columbus Club in Washington, D.C., where Rep. Miller offered views on the importance of the government-sponsored enterprises (GSEs) in providing access to credit for Americans.
“Fannie [Mae] lost money one year, in 1985,” said Rep. Miller in his opening speech. “Freddie [Mac] lost money never. Find me one lender that did that well.”
Rep. Miller hinted that the legislation will outline a moderate approach to mortgage finance reform and the phasing out of the GSEs.
“If you want to hurt taxpayers, cut off the lending market,” said Rep. Miller during his speech. “If you want to hurt the housing market, eliminate the GSEs without providing a viable alternative.”
Miller declined to offer details of the bill but said that he and other lawmakers would introduce the legislation on Wednesday, July 6.
Jeffrey Goldstein, the U.S. Department of the Treasury’s undersecretary for domestic finance, said in the summit’s keynote speech that the Obama Administration is mulling concerns on finalizing the proposed risk retention rule drafted by federal regulators to fulfill provisions of the Dodd-Frank Act.
"We are seriously considering feedback and are committed to getting this rule right, so that we can ensure securitization is a stable and reliable source of credit for consumers, businesses and homeowners," said Goldstein.
The proposed rule includes a new definition for qualified residential mortgages (QRMs), which are loans exempt from the risk retention requirement. The underwriting standards for QRMs laid out in the proposal include a required 20 percent downpayment, strict debt-to-income (DTI) ratios, and borrower credit history restrictions. Public comments were originally due on June 10, but in the wake of criticism from housing and industry groups including NHC, regulators announced on June 7 that they would extend the comment period until Monday, Aug. 1.
The summit convened NHC members, housing leaders and experts from around the country to debate how to reform America’s housing finance system. Panelists and moderators included thought leaders from private development, banks, academia and non-profits. Among them were David H. Stevens, president and chief executive officer of the Mortgage Bankers Association (MBA); Bart Lloyd, manager of acquisitions for Preservation of Affordable Housing; Willy Walker, chairman, president and CEO of Walker & Dunlop; Susan Wachter, Richard B. Worley professor of financial management and professor of real estate and finance at the Wharton School; Lawrence J. White, Robert Kavesh professor of economics at NYU Stern School; Diana Reid, executive vice president of PNC Real Estate and Brian Montgomery, partner and co-founder of The Collingwood Group.