03/12/07 MBA Chairman Robbins Testifies on GSE Reform, Calling for Strong Regulator

WASHINGTON, DC (March 12, 2007) —  John M. Robbins, CMB, Chairman of the Mortgage Bankers Association (MBA), testified today before the U.S. House of Representatives’ Financial Services Committee, Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.  Robbins testified on legislative proposals for GSE reform.

“Fannie Mae and Freddie Mac are critically important to modern mortgage financing, and MBA supports the role the GSEs play in maintaining and improving liquidity and stability in the secondary mortgage market” said Mr. Robbins.  “MBA has long advocated GSE regulatory reform to ensure that they are operating in a safe and sound manner, engaging only in activities that are consistent with their charter purposes, and are subject to reasonable affordable housing goals that do not distort the market.”

“There seems to be general agreement on the fundamental tools a new regulator will need.  MBA is particularly interested in the powers of the regulator related to the review and approval of GSE activities, ongoing and new.  Today, it is unclear whether certain current GSE activities are actually permitted.  The new regulator needs sufficient authority to solve this problem.”  

Robbins further commented on other components of proposed GSE reform legislation.

“We appreciate that H.R. 1427 calculates the size of the contribution to the affordable housing fund on the GSEs’ portfolios rather than on net income.  MBA also believes the GSEs need the flexibility to adjust their portfolios to changing conditions and marketplace needs.”

Robbins’ full testimony can be found at www.mortgagebankers.org.