National Journal on Housing Finance Reform
National Journal
“Sustainable Homeownership: The Future of Housing Finance”
Wednesday, June 3, 2015
Key Topics & Takeaways
- Housing Finance Reform: Rep. Royce (R-Calif.) stated that it is “quite plausible” that Congress could move forward with housing finance reform legislation that President Obama would sign this year, commenting that he is “very optimistic.”
- Secretary Castro said the Obama administration would like to see legislation passed and that there are bipartisan areas of agreement, including the need to “get taxpayers off the hook” and bringing private capital back in the mortgage system.
- FHA Guarantee Fees: Royce briefly discussed the FHA’s lowering of premiums on mortgage insurance, criticizing it as a “short-term policy that doesn’t help people in the long-run.”
Speakers
- Rep. Ed Royce (R-Calif.), Member, House Financial Services Committee
- Julian Castro, Secretary, Department of Housing and Urban Development
Royce Keynote
In his keynote address, Rep. Ed Royce (R-Calif.) stated that it is “quite plausible” that Congress could move forward with housing finance reform legislation that President Obama would sign this year, commenting that he is “very optimistic.” He said the financial crisis stemmed from a catastrophic failure of the housing finance system, and that private capital has been “on the sidelines” ever since. He stressed that getting private capital back in the market is critical to moving the economy forward.
Royce called the government-sponsored enterprises (GSEs) the “unfinished business of the financial crisis” and said the large concentration of housing assets in the GSEs “a threat to the whole economy.” He lamented that the Federal Housing Finance Agency (FHFA) has become the mortgage insurer of first resort rather than last resort, including for high-cost cost homes.” He stressed that government intervention in the housing market is not needed and that he wants to limit the “moral hazard of government support.”
Commenting on Senate Banking Committee Chairman Richard Shelby’s (R-Ala.) “Financial Regulatory Improvement Act,” Royce commended provisions that he called “building block reform that sets the stage for future housing finance reform.” He said reforms to encourage the GSEs to step up risk-sharing activities and requiring the Federal Housing Administration (FHA) to set a timeline to expand their Common Securitization Platform (CSP) beyond the GSEs would be achievable legislative steps to pave the way for comprehensive housing finance reform.
Royce also briefly discussed the FHA’s lowering of premiums on mortgage insurance, criticizing it as a “short-term policy that doesn’t help people in the long-run.” He added that there are “unhappy consequences” when people are enticed into risky loans.
Castro Keynote
Secretary Julian Castro of the Department of Housing and Urban Development (HUD) said in his remarks that responsible homeownership remains a “fundamental pillar” of the American dream that for many is the “best avenue to build wealth.” He said the housing market is now expanding, and it is the responsibility of HUD to help responsible Americans join the market.
Castro highlighted three steps to achieve the goal of promoting homeownership: 1) promoting housing counseling; 2) expanding access to credit by making FHA policies simpler to understand for lenders; and 3) making credit more affordable by lowering mortgage premiums that take money away from people who could otherwise invest it in their futures.
Asked about housing finance reform, Castro said the Obama administration would like to see legislation passed and that there are bipartisan areas of agreement, including the need to “get taxpayers off the hook” and getting private capital back in the mortgage system. However, he added that the concern for Democrats is ensuring access to credit. He said he hopes Congress will be able to pass a comprehensive bill, but that “some sort of starter legislation” could be more likely.
For more information on this event and to view an archived webcast, please click here.
National Journal
“Sustainable Homeownership: The Future of Housing Finance”
Wednesday, June 3, 2015
Key Topics & Takeaways
- Housing Finance Reform: Rep. Royce (R-Calif.) stated that it is “quite plausible” that Congress could move forward with housing finance reform legislation that President Obama would sign this year, commenting that he is “very optimistic.”
- Secretary Castro said the Obama administration would like to see legislation passed and that there are bipartisan areas of agreement, including the need to “get taxpayers off the hook” and bringing private capital back in the mortgage system.
- FHA Guarantee Fees: Royce briefly discussed the FHA’s lowering of premiums on mortgage insurance, criticizing it as a “short-term policy that doesn’t help people in the long-run.”
Speakers
- Rep. Ed Royce (R-Calif.), Member, House Financial Services Committee
- Julian Castro, Secretary, Department of Housing and Urban Development
Royce Keynote
In his keynote address, Rep. Ed Royce (R-Calif.) stated that it is “quite plausible” that Congress could move forward with housing finance reform legislation that President Obama would sign this year, commenting that he is “very optimistic.” He said the financial crisis stemmed from a catastrophic failure of the housing finance system, and that private capital has been “on the sidelines” ever since. He stressed that getting private capital back in the market is critical to moving the economy forward.
Royce called the government-sponsored enterprises (GSEs) the “unfinished business of the financial crisis” and said the large concentration of housing assets in the GSEs “a threat to the whole economy.” He lamented that the Federal Housing Finance Agency (FHFA) has become the mortgage insurer of first resort rather than last resort, including for high-cost cost homes.” He stressed that government intervention in the housing market is not needed and that he wants to limit the “moral hazard of government support.”
Commenting on Senate Banking Committee Chairman Richard Shelby’s (R-Ala.) “Financial Regulatory Improvement Act,” Royce commended provisions that he called “building block reform that sets the stage for future housing finance reform.” He said reforms to encourage the GSEs to step up risk-sharing activities and requiring the Federal Housing Administration (FHA) to set a timeline to expand their Common Securitization Platform (CSP) beyond the GSEs would be achievable legislative steps to pave the way for comprehensive housing finance reform.
Royce also briefly discussed the FHA’s lowering of premiums on mortgage insurance, criticizing it as a “short-term policy that doesn’t help people in the long-run.” He added that there are “unhappy consequences” when people are enticed into risky loans.
Castro Keynote
Secretary Julian Castro of the Department of Housing and Urban Development (HUD) said in his remarks that responsible homeownership remains a “fundamental pillar” of the American dream that for many is the “best avenue to build wealth.” He said the housing market is now expanding, and it is the responsibility of HUD to help responsible Americans join the market.
Castro highlighted three steps to achieve the goal of promoting homeownership: 1) promoting housing counseling; 2) expanding access to credit by making FHA policies simpler to understand for lenders; and 3) making credit more affordable by lowering mortgage premiums that take money away from people who could otherwise invest it in their futures.
Asked about housing finance reform, Castro said the Obama administration would like to see legislation passed and that there are bipartisan areas of agreement, including the need to “get taxpayers off the hook” and getting private capital back in the mortgage system. However, he added that the concern for Democrats is ensuring access to credit. He said he hopes Congress will be able to pass a comprehensive bill, but that “some sort of starter legislation” could be more likely.
For more information on this event and to view an archived webcast, please click here.