MBA, Trade Groups Urge Administration to Stay Course on GSE Reform

The Mortgage Bankers Association and other industry trade groups urged the Trump Administration to maintain momentum on reforming Fannie Mae and Freddie Mac, expressing concerns that reform efforts appear to be stalling on Capitol Hill.

“We are increasingly concerned about efforts to derail comprehensive reform,” the trade groups said in letters to Treasury Secretary Steve Mnuchin and Federal Housing Finance Agency Director Mel Watt. “We urge both Treasury and FHFA to focus on continuing to work with Congress to end conservatorship through comprehensive, bipartisan, legislative reforms.”

The letter notes MBA and more than a dozen other industry organizations have a “deep and abiding interest in reforming Fannie Mae and Freddie Mac to ensure that America’s housing finance system provides a deep and liquid market for long-term single- and multifamily mortgages to serve the housing needs of working families.”

The letter urged Mnuchin and Watt to move forward with their efforts to push GSE reform through Congress.

“As you both have made clear on numerous occasions, housing finance reform must go through Congress to create stable, sustainable housing markets that best serve our nation’s communities,” the letter said. “We fully endorse this point of view and believe the debate over recapitalizing a broken system distracts from the critical structural issues that Congress must address to ensure that the federally supported secondary market serves key, bipartisan objectives.”

MBA and the trade groups said key structural reforms must be implemented by Congress before a decision is made regarding the GSEs and capital retention and Congress should decide the final resolution of the conservatorships.

“As noted by the Congressional Budget Office in 2016, allowing Fannie Mae and Freddie Mac to create a capital cushion simply converts a potential future draw on federal funds into an immediate draw and such an action would effectively increase the size of taxpayer exposure to future losses,” the letter said. “We urge Treasury, FHFA and Congress to remain focused on addressing the long-term housing finance reform efforts necessary to end GSE conservatorship permanently and create a stronger, stable system for the future that helps ensure all in America have access to affordable housing opportunities.”

Joining MBA in the letter: the American Bankers Association; the American Land Title Association; the Asian American Real Estate Association; the Committee on Healthcare Financing; the Consumer Bankers Association; the Consumer Mortgage Coalition; Habitat for Humanity; the Housing Policy Council of the Financial Services Roundtable; the National Affordable Housing Management Association; the National Association of Hispanic Real Estate Professionals; the National Association of Home Builders; the National Association of Housing Cooperatives; and the National Housing Conference Real Estate Services Providers Council Inc.