The House Financial Services Subcommittee on Capital Markets held a hearing on Nov. 3 on legislation offered by panel Chair Scott Garrett (R-N.J.) that would create a robust private market for single-family housing finance. The measure is aimed at eliminating the federal role in guaranteeing mortgage finance.
The proposal would task the Federal Housing Finance Agency (FHFA), the current GSE regulator, with developing and enforcing standards for all residential mortgage-backed securities. It specifically calls on FHFA to create several categories of mortgages with uniform underwriting standards for each as well as uniform securitization agreements and representations and warranties.
It would also repeal the “risk retention” provisions included in last year’s Dodd-Frank financial reform law.
Although the bill is silent on multifamily finance, NAA/NMHC are actively following it because of the indirect impact it would have on the multifamily industry if, as expected, the House considers it in conjunction with a comprehensive GSE reform bill previously introduced by Rep. Jeb Hensarling (R-TX). Hensarling’s bill would completely privatize the housing finance system over the next five years.
Even if the bills pass the House, the Senate is not expected to act on them. Information on Garrett’s bill is available at
http://1.usa.gov/vU3JMP.
Information on GSE reform, NAA/ NMHC’s testimony during earlier hearings, is available at
http://tinyurl.com/4td5kr.