March 15, 2013 – Discussion about the housing finance system continues to heat up in Washington, with two newly unveiled bills that NAFCU will be watching closely as it continues to advocate for its own reform goals.
On Thursday, four Senate Banking Committee members – Sens. Elizabeth Warren, D-Mass., Mark Warner, D-Va., David Vitter, R-La., and Bob Corker, R-Tenn. – unveiled the “Jumpstart GSE Reform Act.” The senators say the bill would prevent the government from using any guarantee fee increase by Fannie Mae and Freddie Mac to offset other government spending. It would also impose a ban on the sale of preferred shares purchased by Treasury without congressional approval.
Over in the House, Reps. Maxine Waters, D-Calif., and Michael Capuano, D-Mass., have reintroduced the “FHA Emergency Fiscal Solvency Act,” a bill aimed at strengthening the long-term solvency of the Federal Housing Administration. The bill would give FHA greater flexibility in taking action against loan originators that use faulty underwriting practices and lenders that end up with high loan losses.
In recent months, FHA reform has taken center stage as lawmakers continue to debate how to address FHA’s financial condition and other challenges. NAFCU continues to express its support for FHA, but would like lawmakers to assert greater oversight over the entity, particularly with respect to its’ three-year lockout period, which could encourage strategic defaults.
NAFCU is also continuing to urge lawmakers on the importance of retaining a housing finance system that ensures credit unions have continued access to the secondary market for mortgage loans.