Warning that this plan threatens to undermine the nation’s housing finance system, NAHB Executive Vice President and CEO Jerry Howard held interviews with several national media outlets following the congressional hearing. He expressed the association’s strong support for HUD, and said that it must remain “the cabinet agency that speaks for housing.”
While the Treasury Department would be an appropriate agency for regulating the financial safety and soundness of the nation’s two major mortgage lenders, Howard said, it is imperative for HUD to retain its current status as the mission regulator for Fannie Mae and Freddie Mac, including its responsibility for approving new programs and establishing annual goals for affordable housing.
“NAHB strongly believes that Fannie Mae’s and Freddie Mac’s ability to spur innovative solutions and to develop new products that increase homeownership will continue only if the mission of these corporations is regulated by HUD, the only cabinet agency with a thorough understanding of, and extensive involvement in, housing-related issues.”
NAHB’s efforts to reach out to its allies in the housing community to help ensure that HUD retains its leadership in housing are producing dividends. The National Association of Realtors® subsequently issued a statement in support of NAHB’s position that HUD should maintain oversight over Fannie Mae and Freddie Mac’s mission and programs.
With Congress set to hold additional hearings on the issue this week, NAHB is sending a message to lawmakers that the rush to enact a quick legislative fix in the wake of Freddie Mac’s accounting problems could produce severe negative consequences for housing.
The Administration’s proposal to strip HUD of its program approval authority for Fannie Mae and Freddie Mac constitutes an attack on the mission of HUD itself by removing the agency’s ability to improve housing opportunities for America’s working families. It would irreparably harm HUD’s ability to focus the efforts of the two giant mortgage lenders on supporting homeownership opportunities for low- and moderate-income and minority families.
Transferring mission oversight of critical financial housing institutions to the Treasury Department, an agency with little experience in evaluating the effectiveness and appropriateness of housing policies, especially those pertaining to housing for working families, would be a grave mistake that could have severe repercussions on a well-working secondary mortgage market system, said Howard.
NAHB is also concerned that some may seek to use the proposed regulatory overhaul to alter the recently imposed system of capital requirements for Fannie Mae and Freddie Mac. These standards are the product of years of careful analysis and effort, and should not be discarded before they have been tested.
“We disagree,” Howard said, “with those who seek changes to the risk-based capital standards for Fannie and Freddie and are encouraged by statements of the House Financial Services Committee members who are urging their fellow lawmakers to proceed in a cautious, deliberative manner before enacting legislation that could radically alter the oversight and functioning of the housing finance system.”
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