Senate Committee Holds Nomination Hearing for Acting FHFA Director Thompson
This week, Federal Housing Finance Agency (FHFA) Acting Director Sandra Thompson testified at a Senate Banking, Housing and Urban Affairs Committee hearing on her nomination to be the agency’s permanent director. If confirmed as the top regulator with oversight of the government-sponsored enterprises ( Fannie Mae and Freddie Mac) and the eleven Federal Home Loan Banks, Thompson would be tasked with implementing the Biden administration’s housing finance plans to expand mortgage access and close the racial wealth gap. During the hearing, Thompson said she would defer to Congress on Fannie and Freddie’s exit from government conservatorship. Fannie and Freddie came under federal control in 2008 as part of a bailout to keep them solvent during the housing market collapse. Responding to a question from Ranking Member of the Committee, Senator Pat Toomey (R-PA), Thompson said FHFA and Treasury could release Fannie and Freddie as they are but that changes to their structure would require legislation. When discussing proposals to turn Fannie and Freddie into utilities or to amend their charters, Thompson stated that “The end state of the enterprises is something that Congress would have to legislate.” Thompson also discussed the need for Fannie and Freddie to build capital and said she would encourage them to transfer more of their risk of mortgage defaults to investors, to help shield taxpayers.
Several Senators also focused on the persistent racial wealth divide and questioned Thompson on how she would narrow the racial disparity in homeownership rates. Thompson responded by stating that she has already tasked Fannie and Freddie with developing equitable housing plans and noted that Fannie Mae recently began incorporating positive rental payment history into credit scoring, to expand mortgage access to people with limited credit records. A confirmation vote on her nomination is expected in the coming weeks. If approved by the Senate, Thompson would be confirmed for a five-year term.
To view the full Senate Committee hearing, click here. To view Thompson’s written testimony, click here.
Lawmakers Demand Answers to Tragic Fire Deaths in Federally-Assisted Properties
In response to recent fire-related tragedies and deaths that occurred in federally assisted housing located in Philadelphia, Pennsylvania and the Bronx, New York, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, and several Democratic Members of the Committee, sent letters to HUD Secretary Marcia Fudge, to New York City and Philadelphia housing authorities, local officials, and to property owners detailing how these tragic events could have been prevented. Specifically, the letters expressed concern over the lack of accountability for properties with low Real Estate Assessment Center (REAC) inspection scores and request detailed written responses. The letters also request detailed information about the communities impacted by the fire and detailed proactive preventive measures that are being undertaken to prevent another such tragedy. To address housing affordability and unsafe conditions in federally assisted housing, the letters also highlight aspects of the Build Back Better Act. If passed into law, the Build Back Better Act would provide $65 billion to address health and safety concerns in public housing, $1 billion to improve the conditions of HUD-assisted multifamily rental properties and $1.75 billion in funding that can be used to increase local capacity for building inspections and code enforcement. The lawmakers have given letter recipients two days to respond to their requests and concerns.
To view the letters, click here.