We commend the President for offering a clear vision for a full housing recovery. We also second the President's call for a swift confirmation of Rep. Mel Watt to serve as the head of the Federal Housing Finance Agency. As we enter into the reform of the mortgage finance system, it is vital to have a qualified Presidential appointee at the helm of this critical agency. Mr. Watt has a track record of strong leadership in crafting practical solutions during the housing crisis.
Beyond the Watt confirmation:
- The Consumer Financial Protection Bureau's recently finalized Qualified Mortgage (QM) rules set to take effect early next year should be given time to work without congressional interference. They provide clear "rules of the road"- for both lenders and borrowers, and help ensure that mortgages are safe and sustainable.
- The upcoming rule on Qualified Residential Mortgages, which determines when a mortgage securitizer holds additional risk capital, should mirror the QM rule and avoid specified down payment requirements that would seriously undermine the ability of many families to become homeowners.
- As the secondary mortgage market is rebuilt, any entity that replaces Fannie Mae and Freddie Mac must include an explicit and paid-for government guarantee and a duty to serve the entire market. The new system must ensure that all Americans have fair access to safe and affordable 30-year fixed rate mortgage credit.
- Finally, although the frequency of foreclosures has passed its peak, there are approximately one million homeowners still facing foreclosure. Efforts must continue to help struggling homeowners to avoid unnecessary foreclosures with practical modifications, and refinance opportunities.