The Financial Services Roundtable’s Housing Policy Council (HPC) President John Dalton urged Congress to continue working toward bipartisan legislation that would reform the housing finance system and create a future secondary mortgage market. Dalton made his remarks in a speech to the American Mortgage Conference in Raleigh, North Carolina.
“The time to act is now. Finalizing legislation on an issue as complex as this will take time, but it should be months not years,” Dalton said. “We have debated the issue for several years. This is an opportunity to move it forward. We can establish a stronger housing finance system and sustain confidence in the continuing U.S. housing recovery.”
HPC, which represents 31 of the nation’s largest mortgage servicers, insurers and originators, supports a new system that includes a steady wind-down of government-sponsored enterprises Fannie Mae and Freddie Mac and creates several privately capitalized insurers to replace the GSEs. The new system should be based on several layers of private capital to protect the American taxpayer and include a defined federal backstop to provide the consistent availability of mortgage credit that enables American homebuyers to obtain stable products like the 30- year fixed rate mortgage that they continue to value.
Congress is currently working on two different housing reform bills—one introduced in the Senate by Sens. Bob Corker and Mark Warner and the PATH Act sponsored by House Financial Services Committee Chairman Jeb Hensarling.
“It is a very positive development that the debate over housing finance reform is heating up. It demonstrates that there is enough confidence in the recovery of the housing market and overall economy to begin seriously considering structural reforms,” Dalton said. “The fact that Senators Corker and Warner were able to introduce bipartisan legislation is a very positive development and Senate Chairman Tim Johnson and Ranking Member Mike Crapo have taken up the issue…[and] we are encouraged that Chairman Hensarling and his staff have sought feedback on the PATH bill."