CUs see secondary mortgage market protections in new housing plan

by NAFCU Newsroom

A new housing finance reform discussion draft – unveiled Thursday by House Financial Services Committee Chairman Jeb Hensarling, R-Texas, and Rep. John Delaney, D-Md. – would preserve a NAFCU-sought government guarantee to the secondary mortgage market and create more lending opportunities for small lenders.

“We support the overarching goal of Chairman Hensarling and Rep. Delaney’s GSE reform draft to create a level playing field in the single-family mortgage market,” said NAFCU President and CEO Dan Berger. “As Congress gears up for housing finance reform and considers this legislation and other approaches, it is important that vibrant competition remains throughout the system and that credit unions maintain unfettered access to the secondary mortgage market and fair pricing based on loan quality, not quantity.”

The draft bill, the Bipartisan Housing Finance Reform Act, would repeal the government-sponsored enterprises’ (GSEs) charters and would instead use Ginnie Mae as the provider of the explicit government guarantee on mortgage-backed securities (MBS). Currently, Ginnie Mae backs payments of principal and interest to those that invest in the Federal Housing Administration and other government-insured loans.

 

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