Johnson wants bipartisan GSE plan by year-end
Sept. 13, 2013 – Senate Banking Committee Chairman Tim Johnson, D-S.D., pointed to the Corker-Warner housing finance reform bill as evidence that there is bipartisan agreement that reform must include government-guaranteed access to the secondary mortgage market.
Johnson made his comments in opening a full-committee hearing on Thursday that drew testimony on how the Corker-Warner housing finance reform bill would impact small lenders.
Johnson, who led the hearing along with committee Ranking Member Mike Crapo, R-Idaho, said his goal is a bipartisan agreement on reform by the end of the year.
Thursday’s hearing witnesses included the director of housing finance policy from the Center for American Progress, the CEO of SunTrust Mortgage Inc. (a subsidiary of SunTrust Bank), the executive director of the Structured Finance Industry Group and the chief economist from Moody’s analytics.
The Corker-Warner bill – S. 1217, or the “Housing Finance Reform and Taxpayer Protection Act of 2013” – focuses on government-sponsored enterprise reform and was proposed by Sens. Mark Warner, D-Va., and Bob Corker, R-Tenn., who also sit on the Banking Committee.
Moody’s Chief Economist Mark Zandi, asked about the effectiveness of S. 1217, said that its establishment of a multi-lender securitizer to help small lenders would be helpful. Zandi estimated that average monthly mortgage payments would increase about $60, or 40 basis points, under the bill, but Corker argued that the bill would make up for this by lowering costs from the uniform securitization platform and from general increased contributions.
NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt wrote the leaders of the Senate Banking Committee Wednesday to emphasize the importance of credit unions having guaranteed access to the secondary mortgage market. Hunt also emphasized the need for fair pricing that is not based on an institution’s size or loan volume. She pointed out that credit unions were not to blame for the financial crisis and are known for “solid underwriting that creates high-quality loans.”