The failure of Congress to agree on a comprehensive housing reform bill this year does not mean housing reform is not happening. The Federal Housing Finance Agency (FHFA) has seized the opportunity to reform the mortgage finance industry in the absence of Congressional action. Ultimately, Congress will pass a housing reform bill, but by the time they get around to it most of the critical decisions will have been made by FHFA. Currently on the agenda for FHFA are the following issues which National REIA’s lobbying arm in Washington, D.C. will monitor:

 

  • Common Securitization Platform: Fannie and Freddie use outdated technology and engage in duplicative activities in the mortgage securitization process. FHFA is working on creating the common platform and a common security to lower costs for consumers and reduce risk pricing distortion.
  • Credit Availability: FHFA recognizes that borrowers with less than excellent credit and small down payments are having difficulties getting loans. Current FHFA leadership has placed credit availability as a top priority for the agency, and as important has de-prioritized the goal of reducing the scope and size of Fannie and Freddie. Action on affordable housing goals and expansion of credit availability will take place at FHFA in the near future.
  • Mortgage Servicers: FHFA is considering placing capital requirements on non-bank mortgage servicers to reduce their potential risk to the housing market given their rapid growth. The Consumer Financial Protection Bureau has already passed regulations governing servicers designed to improve their performance in serving consumers, and additional regulations, including requiring a plan on how to service each mortgage in a portfolio before the rights are sold, are in the works.