MBA’s Broeksmit to Testify Today Before Senate Banking Committee

Mortgage Bankers Association President & CEO Robert Broeksmit, CMB, will testify this morning before the Senate Banking Committee on housing finance reform.

Banking Committee Chairman Mike Crapo, R-Idaho, invited Broeksmit to appear before the committee several weeks ago as part of a two-part hearing this week designed to bring housing finance reform legislation to the forefront in the 116th Congress. The first hearing took place yesterday.

Broeksmit is expected to discuss MBA efforts to promote reforms that ensure a stable, liquid secondary market that supports the primary residential mortgage market and call for legislation to enact such reforms.

In February, Crapo released an outline of a housing reform bill that would create a “permanent, sustainable new housing finance system” that includes the following elements:

–Reduces the systemic, too-big-to-fail risk posed by the current duopoly of mortgage guarantors;

–Preserves existing infrastructure in the housing finance system that works well, while significantly increasing the role of private risk-bearing capital;

–Establishes several new layers of protection between mortgage credit risk and taxpayers;

–Ensures a level playing field for originators of all sizes and types, while also locking in uniform, responsible underwriting standards; and

–Promotes broad accessibility to mortgage credit, including in underserved markets.

The framework includes substantial alignment with the MBA 2017 GSE reform proposal (https://www.mba.org/issues/gse-reform), which calls for a system in which well-capitalized, private guarantors issue and provide credit enhancement on securities that receive a full-faith-and-credit federal government guarantee through Ginnie Mae. It would also split the multifamily operations at the GSEs into separate guarantors.

Joining Broeksmit in testimony: Michael Bright of The Structured Finance Industry Group; Lindsey Johnson, President of U.S. Mortgage Insurers; Vince Malta of the National Association of Realtors; Carrie Hunt of the National Association of Federally-Insured Credit Unions; and Michael D. Calhoun of the Center for Responsible Lending.

The hearing begins at 10:00 a.m. ET in 538 Dirksen Senate Office Building and can be accessed online at https://www.banking.senate.gov/hearings.

MBA NewsLink will provide coverage.