As House Prepares to Vote, MBA Urges Passage of Housing Bill

MBA (7/23/2008 ) Sorohan, Mike
With the House expected to take up an omnibus housing bill as early as this afternoon, the Mortgage Bankers Association sent a letter yesterday to House and Senate leadership urging both chambers to move quickly in passing the legislation.
The letter from MBA Chairman Kieran Quinn, CMB, said Congress should look beyond minor stumbling blocks that threaten to impede the bill’s passage and instead focus on the bigger picture—passing the bill.

“Recognizing that crucial reforms are needed to stabilize and set the course for a recovery of the housing market, the Mortgage Bankers Association urges Congress to finish the omnibus housing legislation before August,” Quinn wrote. “This legislation would make important contributions to the current market situation.”

The housing bill includes a number of provisions supported by MBA:

• GSE Reform. The bill would reform regulation of Fannie Mae and Freddie Mac, which Quinn said would ensure that “these shareholder-owned companies continue to operate in a safe and sound manner, engage in activities consistent with their charter purposes, and are subject to reasonable affordable housing goals that do not distort the market.”

• FHA Modernization. MBA said improving FHA, which has had an important historic role in expanding homeownership opportunities, would ensure that the agency once again becomes a leader in the mortgage market. “Using FHA to help families who are in trouble through a new FHA re-financing program has the potential to help keep hundreds of thousands of people facing financial trouble in their homes,” Quinn said. “The impact of this program will be positive not only for the homeowners who benefit, but for our communities and the larger housing market as well.”

• Tax-Exempt Revenue Bonds. The bill would allow state housing finance authorities to develop and implement refinance programs for troubled borrowers using tax-advantaged mortgage revenue bonds. “Providing tax incentives to bring new home buyers into the market will help clear out some of the inventory of unsold housing currently on the market,” Quinn said.

• Additional Support for the GSEs. The legislation would implement a proposal announced by Treasury Secretary Henry Paulson, Jr. to provide additional support for Fannie Mae and Freddie Mac through temporary expansion of the government’s explicit guarantee of GSE debt. “This will help ensure the smooth functioning of our markets by helping attract private capital to support the GSEs’ public mission,” Quinn said.

“MBA strongly supports the passage of this legislation and urges Congress to quickly send this bill to the President for his signature,” Quinn added.

The letter went to Senate Majority Leader Harry Reid, D-Nev.; Senate Minority Leader Mitch McConnell, R-Ky.; House Majority Leader Steny Hoyer, D-Md.; and House Minority Leader John Boehner, R-Ohio.