Skip to main content

FHFA’s Watt: Congress Needs to Move on GSE Reform

Phil Hall
May 11, 2017
A coalition of more than 20 financial and real estate trade organizations called on the U.S. Senate to confirm Kathy Kraninger as the next Director of the Consumer Financial Protection Bureau (CFPB)

The director of the Federal Housing Finance Agency (FHFA) urged Congress needs to take responsibility for housing finance reform and offer a strategy to end federal conservatorship of the government-sponsored enterprises (GSEs).
 
In an appearance this morning before the U.S. Senate Committee on Banking, Housing and Urban Affairs, FHFA Director Mel Watt noted that while his regulatory can take credit for “many reforms” to the business models and operations of Fannie Mae and Freddie Mac, their conservatorship is not sustainable. Going forward, Watt stated that Congress must take the next step in determining the GSEs’ future.
 
“So, I want to reaffirm my strong belief that it is the role of Congress, not FHFA, to make these tough decisions that chart the path out of conservatorship and to the future housing finance system,” he said, adding that Congress needed to ask difficult questions on the future structure of the GSEs and to determine the depth and scope of their role in federal housing policy.
 
Watt also warned of the possibility that the GSEs could slip back into financial tumult. “Like any business, the Enterprises need some kind of buffer to shield against short-term operating losses,” he continued. “In fact, it is especially irresponsible for the Enterprises not to have such a limited buffer because a loss in any quarter would result in an additional draw of taxpayer support and reduce the fixed dollar commitment the Treasury Department has made to support the Enterprises. We reasonably foresee that this could erode investor confidence. This could stifle liquidity in the mortgage-backed securities market and could increase the cost of mortgage credit for borrowers.”

 
Impact Of Juneteenth Holiday On Residential Mortgage Closings

The CFPB is aware of concerns regarding implementation of the new Juneteenth Federal holiday as it relates to mortgage lender compliance with Truth in Lending Act.

Regulation and Compliance
Jun 24, 2021
Biden Appoints Sandra Thompson As Acting Director Of The FHFA

The White House appointed Sandra L. Thompson as acting director of the Federal Housing Finance Agency (FHFA), effective immediately. Her statement reveals that a permanent director will be confirmed in December.

Regulation and Compliance
Jun 24, 2021
The New URLA – What’s the Big Deal?

Lenders will need to update their technology stack to comply with the redesigned URLA.

Regulation and Compliance
Jun 14, 2021
Texas State Legislators Looks To Protect Reverse Mortgage Borrowers

A Texas House Bill has been introduced to prevent false, misleading or deceptive advertising by reverse mortgage lenders.

Reverse
Jun 02, 2021
Could Prudential Standards for Nonbank Mortgage Servicers be Eased?

From The Desk Of The “Om-Bobs-Man”

Regulation and Compliance
May 31, 2021
Get Ready to Duck and Cover

After years of hands-off attitude by regulators, a new wave of mortgage enforcement is building. Expect a tsunami.

Regulation and Compliance
May 13, 2021