TheMReport — News and strategies for the evolving mortgage marketplace.

Issue link:

Contents of this Issue


Page 58 of 67

Th e M Rep o RT | 57 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t SECONDARY MARKET The laTesT government Housing Finance Policy specialist discusses FHFa's conservatorship of gses The obama administration says it is ready to discuss housing finance reform, but the industry harbors skepticism. s peaking at the National Council of State Housing Agencies Legislative Conference last month, U.S. Department of Treasury Counselor to the Secretary for Housing Finance Policy Dr. Michael Stegman said the Obama Administration is "ready, willing, and able" to talk housing finance reform, which has been a hot-button topic in recent months as Fannie Mae and Freddie Mac remain in conservatorship of the Federal Housing Finance Agency (FHFA). "As memories of the financial crisis fade, we cannot become complacent. The best time to act is when the housing market is well along the path to recovery and credit markets are normal- izing, not on the precipice of a new economic shock when there is little time to be thoughtful." While Stegman's remarks on the subject of housing finance reform may seem optimistic, many mortgage industry professionals are not convinced. On the same morning that Stegman delivered his speech at the NCSHA's conference, the Collingwood Group and the Five Star Institute released their March 2015 Mortgage Industry Outlook report containing a survey in which 60 percent of mortgage industry professionals polled said there was "zero chance" of housing finance reform happening under the Obama Administration, which ends in January 2017. About 34 percent of respondents in that survey said they believed there was less than a 25 percent chance of housing finance reform taking place under Obama's watch. Stegman said the administra- tion would not end the conser- vatorship of the GSEs without a viable alternative that provides that elusive balance between eliminating taxpayer risk while still allowing credit access. "I know that many of you want to know where we are on housing finance reform," Stegman said. "On this subject, let me be clear: the Administration stands by our belief that the only way to responsibly end the conservatorship of Fannie Mae and Freddie Mac is through legislation that puts in place a sustainable housing finance system that has private capital at risk ahead of taxpayers, while preserving access to mortgage credit during severe downturns." Stegman also discussed the Hardest Hit Fund, which the government created in response to the financial crisis and stated that to date the fund has provided more than $3.8 billion for 70 programs to help approximately 227,000 homeowners in the communities that were hit the hardest by the recession. percent of their income in rent, live in severely inadequate hous- ing, or both." Castro emphasized the push to lift more Americans into the middle class through programs that can provide links to upward mobility in the mission to end chronic homelessness and work to end homelessness among families and youth. A proposed $2.5 billion would fund Homeless Assistance Grants, which help combat homelessness by provid- ing communities with housing and service investments. "With Congress' support through programs like HUD- VASH, we have seen dramatic reductions in homelessness among veterans. If our nation in- vests in the targeted programs we know work, we can make similar progress in tackling other forms of homelessness," Castro said. HUD plans to use $100 million to fund Jobs Plus, a program designed to help low- income families living in HUD- subsidized housing to build careers. Another $85 million will be invested into HUD's Family Self Sufficiency Initiative, which equips about 80,000 families with financial literary training and childcare and transportation services. Castro asked for Congress' support to eliminate the Rental Discrimination Cap, saying it would "put billions of dollars in private financing for public hous- ing preservation and create thou- sands of jobs in the construction trades and other industries." Castro closed his testimony by citing the $250 million pro- posed in the budget for HUD's Choice Neighborhoods Initiative, a program he said has shown impressive success. Between fis- cal years 2010 and 2013, the $351 million HUD invested in these grants leveraged more than $2.6 billion of additional investment in extremely low-income com- munities. "As HUD commemorates 50 years of advancing policies that create opportunity for all," he said. "We're also creating a solid foundation for the next 50 years and beyond."

Articles in this issue

Archives of this issue

view archives of TheMReport - MReport_April2015