Associations Weigh In on Housing Finance Debate

WASHINGTON, DC-Congress is getting set to debate the fate of the GSEs and other matters related to housing finance reform. Weighing in with their opinion on the subject is a group of related associations.
The groups, which include the American Bankers Association, American Financial Services Association, CRE Finance Council, Housing Policy Council of the Financial Services Roundtable, Mortgage Bankers Association, National Association of Home Builders, National Multi Housing Council and Real Estate Roundtable to name just a few, offered up principals or guidelines they would like to see followed as the system is reformed. They are:

• Acknowledgement that a stable housing sector is essential for a robust economic recovery and long-term prosperity;
• Realization that private capital must be the dominant source of mortgage credit, and must also bear the primary risk in any future housing finance system;
• A continuing and predictable government role to promote investor confidence and ensure liquidity and stability for homeownership and rental housing;
• A reasonable and measured approach to changing the mortgage finance system and, over a reasonable transition period, to ensure that a reliable mortgage finance system is in place.

MBA offered up a similar proposal during the height of the crisis, said Chairman Michael D. Berman, in testimony before the Senate Banking Committee. “Our proposal recognizes the need for a wider array of products through a re-emergence of the private market, including private label securities and covered bonds….[It]  combines an acknowledgement that only a government guarantee can attract the depth and breadth of capital necessary to support the market during times of economic stress, with a reliance on private capital, insistence on multiple layers of protections for taxpayers and a focus on ensuring a competitive, efficient secondary mortgage market.”