A former FHA commissioner said he supports a proposal in the Protecting American Taxpayers and Homeowners Act (PATH Act) to spin off the FHA from the Department of Housing and Urban Development as an independent government-owned corporation. Brian Montgomery, who was assistant secretary for housing and head of the FHA during the Bush administration, said the separation, if enacted, would transfer authority, resources and personnel from HUD to the FHA to manage the insurance fund. “This is something I have advocated both during and after my more than four-year tenure as FHA commissioner,” said Montgomery, who ...
The FHA is trailing Fannie Mae, Freddie Mac and the Department of Veterans Affairs in the disposition of real estate-owned properties, according to a new study from the Government Accountability Office. The study found that FHA’s net proceeds from REO sales from January 2007 through June 2012 were about 4 to 6 percentage points lower than Fannie’s and Freddie’s returns. The differences in combined returns between FHA and the government-sponsored enterprises persisted at an estimated 2 to 5 percent even after controlling for differences in value, location, market conditions and other relevant factors. In addition, the FHA took about ...
Industry groups are lauding a House Republican’s move last week to re-file a legislative countermeasure against municipalities seeking to use eminent-domain powers to acquire performing but underwater mortgage loans as a warning against localities still entertaining such a course of action. The Defending American Taxpayers from Abusive Government Takings Act, H.R. 2733, by Rep. John Campbell, R-CA, would prevent the “reckless” seizure of distressed home loans by local governments, a move that’s both legally questionable and that represents “a complete abrogation of private property rights.” “The federal government and the American taxpayer would be forced...
The House Financial Services Committee this week approved legislation that would dissolve the government-sponsored enterprises and leave the private market to pick up the slack, with all the panel’s Democrats and two Republicans voting against it. Obama administration officials suggest that bipartisan support will be necessary to enact GSE reform and significantly increase non-agency involvement in housing finance. The Protecting American Taxpayers and Homeowners Act of 2013, H.R. 2767, was sponsored by ...
Voting largely along party lines, the Republican-held Housing Financial Services Committee this week approved H.R. 2767, the Protecting American Taxpayers and Homeowners Act, by a 30-27 margin, advancing the measure to the House floor for consideration a mere two weeks after it was filed. The focal point of the committee’s debate was the conspicuous absence of a government mortgage guaranty to replace the backing provided for Fannie Mae and Freddie Mac mortgage-backed securities over the years. Democrats such as Massachusetts Rep. Stephen Lynch painted the GOP measure as an “ideologically extreme and dangerous bill” that would destroy the 30-year fixed-rate mortgage if signed into law as is. The bill by Committee Chairman Jeb Hensarling, R-TX, would end conservatorship of the GSEs within five years and put them into receivership, eliminate their government charter and liquidate any remaining assets...
FHA Commissioner Carol Galante this week expressed support for bipartisan reform legislation in the Senate that would provide the agency with tools it had requested to strengthen its finances and operation. Further discussion and clarification, however, may be needed with regard to certain provisions as well as issues that were not addressed in the draft bill, she said. Galante appeared as the sole witness at a hearing called by the Senate Committee on Banking, Housing and Urban Affairs to consider a draft of the FHA Solvency Act of 2013. The Senate bill is significantly narrower in scope than the FHA provisions included in a broader mortgage finance reform bill approved by the House Financial Services Committee this week. The Senate bill would help...
Both supporters and detractors of a House Republican bill aimed at comprehensive mortgage finance reform told members of the House Financial Services Committee this week the proposal has room for improvement, but the author of the proposal is pulling out all the stops to get the legislation on the fast track despite a nearly complete lack of bipartisan support. This week’s hearing, called by Rep. Jeb Hensarling, R-TX, committee chairman and author of the Protecting American Taxpayers and Homeowners Act, was designed to gather input on the bill with an eye toward marking up the PATH Act before the House adjourns for its August recess. The bill would put...
In what may well be his last appearance before Congress as chairman of the Federal Reserve, Ben Bernanke this week indicated the central bank’s much-debated “tapering” of its massive asset purchase program is likely to begin later this year and then cease altogether by the middle of 2014, assuming the U.S. economy progresses as the Fed anticipates. At the same time, the Fed chief emphasized the Federal Open Market Committee will continue to be flexible in responding to market and economic conditions, all based on the flow of data coming into the committee. Bernanke said the FOMC has made...
Supporters are defending a House Republican proposal to liquidate Fannie Mae and Freddie Mac and let the private market fill in the gaps. But despite a nearly complete lack of bipartisan support and even doubts from within his own party, the author of the proposal is pushing hard to fast-track the bill. This week, the House Financial Services Committee heard testimony from 11 experts on the Protecting American Taxpayers and Homeowners Act, introduced last week by Rep. Jeb Hensarling, R-TX.“The PATH Act is a comprehensive proposal to create a sustainable housing finance system by ending the federal government’s domination of the housing finance market and give consumers more choices in determining which mortgage product best suits their needs,” said Hensarling.
Senate Banking Committee Chairman Tim Johnson, D-SD, and Ranking Minority Member Mike Crapo, R-ID, have released a draft FHA solvency bill that is far less ambitious than legislation proposed by House GOP leaders last week. The Senate bill, the FHA Solvency Act of 2013, would essentially shore up the existing FHA program by allowing higher mortgage insurance premiums and requiring a bigger capital buffer. The housing finance reform bill introduced by Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee, would significantly change the FHA program by narrowing its focus and limiting the depth of coverage it provides. The draft Senate bill contains...
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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