MBA Statement on FHFA Director Watt’s Comments

WASHINGTON, D.C. (May 13, 2014) –  David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA), issued the following statement after remarks made by FHFA Director Mel Watt today at the Brookings Institution.

“In his first major speech outlining his priorities as the conservator for, and regulator of, Fannie Mae and Freddie Mac, Director Watt is showing that he has hit the ground running and put a lot of thought into the path he intends to take with the two companies.  The housing recovery has been hampered by the uncertainty surrounding the future of the secondary mortgage market and Director Watt’s remarks should help ease some of those concerns by providing a clearer roadmap for the short term.   

“The Director has signaled he intends to take a balanced approach designed to ensure a fair and competitive mortgage market that can serve the financing needs of homeowners and the multifamily rental market, while also taking steps to engage more private capital and reduce taxpayer exposure. I was very pleased to hear him focus on issues around access to credit for qualified borrowers and ensuring sufficient liquidity to provide a variety of housing options to lower and middle class Americans, both buyers and renters alike.

“Director Watt appears focused on several items that we have been advocating for, including greater clarity around reps and warrants, enhanced risk sharing to bring in more private capital and moving toward a common or fungible GSE security.  Importantly, he is moving forward quickly with key changes that can be made now and appears committed to working with the industry on further improvements.

“Given the difficulties passing GSE reform legislation as the mid-term elections approach, it is good to see Director Watt looking hard at the tools he has at his disposal to help reform and improve the housing finance system.  To be sure, this does not in any way lessen the need for Congress to enact needed reforms, but the Director’s comments today indicate that positive change could be on its way in the meantime.”