Federal Housing Finance Agency (FHFA) Director Mel Watt sent a letter and an accompanying report to the Senate Banking Committee on January 16 to provide the agency’s perspective on housing finance reform. The report states that a future housing finance system should ensure sustainable rental options for families across income levels and maintain a focus on serving rural and other underserved markets. Mr. Watt stated he still has a “strongly held view that it is the prerogative and responsibility of Congress, not FHFA, to decide on housing finance reform.” He reiterated that the ongoing conservatorship of mortgage giants, Fannie Mae and Freddie Mac, is not sustainable and needs to end.
The report says that if Congress provides an explicit government guarantee on mortgage-backed securities, future “secondary [mortgage] market entities” should remain subject to affordability obligations. The report further states that if any new approaches or authorities are substituted for any or all existing authorities (e.g., authority to fund the national Housing Trust Fund and Capital Magnet Fund, set housing goals, and review and assess duty to serve plans), they should provide benefits at least comparable to those existing requirements.
See Director Watt’s letter at: http://bit.ly/2FUQRmH
See the accompanying report at: http://bit.ly/2FQl99U