Senate Banking Committee hears testimony on the housing finance system
Yesterday, the Senate Committee on Banking, Housing, and Urban Development held a hearing titled “the Status of the Housing Finance System after Nine Years of Conservatorship,” with Federal Housing Finance Agency (FHFA) Director Mel Watt as the sole witness. Although the Senate hearing coincided with legislation introduced in the House to overhaul Dodd-Frank through Chairman Hensarling’s CHOICE Act, similar legislation has yet to be introduced in the Senate.
In what was by and large a civil discussion, Director Watt fielded questions from bipartisan lawmakers regarding the government-sponsored enterprises (GSEs) known as Fannie Mae and Freddie Mac. Topics of discussion included preserving the 30-year fixed rate mortgage throughout privatization or other reform processes; ensuring dedicated revenue to the National Housing Trust and neighborhood revitalization; improving access to affordable housing in underserved markets; and expanding investments in the multifamily rental housing stock.
“I want to reiterate,” said Director Watt, “that these conservatorships are not sustainable, and they need to end as soon as Congress can chart the way forward on housing finance reform. However, it is important for all of us to recognize that the conservatorships have led to numerous reforms of the Enterprises and their operations, practices, and protocols that have been extremely beneficial to the housing finance markets and have reduced exposure and risks to taxpayers.”
In his opening statement, Banking Committee Chairman Mike Crapo (R-ID) said, “While Fannie and Freddie are currently earning profits, if the housing market experiences a downturn, taxpayers could again be on the hook for billions of dollars. The status quo is not a viable option.”
Ranking Member Sherrod Brown (D-OH) agreed with the need for reform, stating, “The Committee should continue its work examining the gaps in the housing market that the housing crisis exposed…The affordable housing goals for single family and multifamily housing along with the
Duty To Serve Rule are keys tools to continue prioritizing affordable access and prudent experimentation to safely reach underserved borrowers.”
To watch a recording of the hearing, please click
here.
Brian Montgomery nominated to run the Federal Housing Administration
This week, the Trump Administration announced its intention to nominate Brian Montgomery as Federal Housing Administration (FHA) Commissioner. Previously, Montgomery ran the FHA under the George W. Bush Administration and served as deputy assistant to the President from 2001 – 2005.
Currently the co-founder and vice-chairman of the housing finance consulting firm Collingwood Group, Montgomery is expected to be officially nominated as soon as requisite background and ethical checks clear. In the past, the expected nominee has expressed concerns over the state of mortgage regulation and of the housing market in general. Once confirmed by the Senate, the incoming commissioner is expected to contribute significantly to the debate on housing reform.
USDA Secretary reorganizes Agency to eliminate Undersecretary for Rural Development
This week, newly-confirmed Secretary of Agriculture Sonny Perdue announced a number of reorganizations within the agency, such as shifting the department’s Rural Development agencies to report directly to the Secretary. The restructuring is achieved by eliminating the position of Undersecretary for Rural Development, while elevating the RD leadership to Assistants to the Secretary. At this time, it is unclear how this change will affect the state offices and directors.
To view the Secretary’s report, including the Organization Chart under Appendix A, please click
here.
