On September 15, the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises held a hearing on the future of housing finance and the status of Government-Sponsored Enterprises (GSEs).
In his testimony, Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco indicated that a principal focus of FHFA conservatorship role has been to maintain the GSEs secondary mortgage market role “until legislation produces a resolution of their future” and minimize losses, limit risk exposure and ensure GSEs price their services to adequately address their risks and costs.
DeMarco also stated that while in conservatorship, GSEs will be “limited to continuing their existing core business activities and taking actions necessary to advance the goals of conservatorship.” DeMarco added that he has “not authorized any new products due to the operational challenges inherent in new product offerings and the need for the Enterprises to devote full attention to loss mitigation activities and remediation of internal weaknesses.”
In June, FHFA issued a proposed rule indicating that FHFA would not consider manufactured home loans secured by personal property as part of the GSEs’ duty to serve obligations.
During questioning, DeMarco and Assistant Treasury Secretary for Financial Institutions Michael Barr indicated that while they were unsure what system would eventually replace the GSEs, both expected a dramatically different system than the current two-firm model and potentially a system that was served entirely by the private market absent any implicit or explicit governmental guarantee.
In preparation for the hearing, MHI staff worked with subcommittee leadership staff and Reps. Travis Childers (D-MS) and Joe Donnelly (D-IN) to submit questions for the record to FHFA “which will be included as part of the hearing’s written permanent record” on the development of a secondary market for manufactured home loans secured by personal property. MHI staff will releases FHFA’s responses once they are available.
Click here to view a webcast of the hearing and to access witness testimony.
For more information, contact MHI Vice President of Government Affairs Jason Boehlert at 703-558-0660 or jboehlert@mfghome.org.
