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MBA's Stevens calls for faster GSE reforms

In a speech Monday, Mortgage Bankers Association President David Stevens said that reforms on the government sponsored enterprises (GSEs) aren’t moving fast enough.

Stevens also said that mortgage industry needs a government-appointed housing finance policy expert in the next administration and a rewrite on the qualified mortgage rule.

“Uncertainty around the future of the GSEs continues to paralyze investment in new or dormant securitization channels, but we have still made progress,” said Stevens, speaking at the MBA’s annual secondary conference in New York.

 “Conservatorship was never intended to be permanent,” he continued.  

Stevens, a former U.S. Department of Housing & Urban Development assistant secretary for housing, touted the federal government’s progress in creating a single securitization platform, but said the effort needed to move more quickly to ensure that the secondary market is standardized and efficient. He also called for a greater role in private mortgage insurance that involves more upfront risk sharing.   

Stevens stopped short of calling for the end of the profit sweeps to rebuild the GSEs’ capital buffers but did allude to the mandated wind down of Fannie Mae and Freddie Mac's reserves. The GSEs are scheduled to have zero capital buffers by the beginning of 2018.

“Let's be clear, our calls for GSE reform are to protect the critical role these two companies perform,” Stevens said. “Conservatorship with no capital and facing a political regime change poses a real threat to our mortgage system.”

Stevens also said a rewrite of the qualified mortgage (QM) rule is needed. He warned that access to credit could be severely restricted once the temporary exemptions on QM are eliminated.

Stevens said a senior administration housing policy adviser should be appointed to ensure that the regulatory agencies “meet, talk to each other, and consider the implications of the confusion and conflict created by uncoordinated overlaps in the rules."


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