Senate Banking Committee Hold Hearing on Housing Finance Reform

On Thursday, June 29th, the Senate Banking Committee held a hearing on the "Principles of Housing Finance Reform". Testifying during the hearing were David Stevens, President of the Mortgage Bankers Association; Michael Calhoun, President of the Center for Responsible Lending; and Ed DeMarco, President of the Housing Policy Council at the Financial Services Roundtable.

During an opening statement, Sen. Mike Crapo, the committee's Chairman, highlighted a number of guiding principles for reform, including the importance of preserving "the to-be-announced market and an affordable, accessible 30-year fixed rate mortgage". At the close of his statement, the chairman emphasized the need for Republicans and Democrats on the committee to work together in developing a strategy for reform.

The hearing comes just over a month after FHFA Director Mel Watt testified before the committee during a hearing focused on the status of the housing finance system "after nine years of conservatorship". In contrast to that earlier hearing which provided an in-depth review of the GSEs' current operations, the committee's discussion primarily covered the broad outlines of alternative structures for the market, providing a level playing field for mortgage lenders, and developing strategies for ensuring access to affordable housing.

The opening statements of each of the witnesses can be found on the Senate Banking Committee's website, with each witness noting the need for housing finance reform legislation that avoids the scenarios that led to the great recession, while ensuring a smooth transition to the future state. SFIG will continue to monitor this and other hearings touching on housing finance reform. To take part in our GSE Reform Task Force, please contact William.Innes@SFIndustry.org.

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