Housing experts, lawmakers express support for Obama housing plan

He connected the housing plan to immigration reform, another of his top priorities, saying that the Senate-passed legislation would help boost home prices. Immigrants accounted for 40 percent of new homeowners nationwide between 2000 and 2010, according to the White House. 

{mosads}Obama said the steps will help lay “a rock-solid foundation to make sure the kind of crisis we just went through never happens again.” 

Stevens noted the importance of the president’s plan to transition the mortgage market to relying primarily on private capital, “while at the same time ensuring sufficient liquidity and the availability of the affordable 30-year fixed-rate mortgage, in both good and bad times, and mortgages that finance multifamily rental housing, through an appropriate use of a government guarantee.”

He pointed out what appears to be Obama’s willingness to adopt a common securitization platform and risk-share options, both of which are key components the MBA believes should be part of reforming the secondary mortgage market and can be implemented without legislation. 

“Going forward it will continue to be critical that the White House and Congress work in a bipartisan, cooperative manner to develop and implement long-term housing finance policies that support and protect all consumers, while at the same time promotes access to credit for all qualified borrowers,” Stevens said. 

The MBA had recently called on the White House to make some minor changes to the finance system that could be done quickly and would not have to go through Congress. 

Preservation of the 30-year mortgage has become a central focus for many housing industry experts in the push for an overhaul of the mortgage finance system. 

Rick Judson, chairman of the National Association of Home Builders (NAHB) and a homebuilder and developer from Charlotte, N.C., said that the availability of the 30-year loan will “preserve financial stability, promote investor confidence and limit taxpayer exposure.”

The Financial Services Roundtable said that the mortgage finance system can shift to a greater role by private lenders without ending the popular 30-year loan. 

“Moving toward a private system can be done while maintaining access to 30-year mortgages for credit worthy homebuyers,” said Tim Pawlenty, president and CEO of the Roundtable. 

“It has been five years since Fannie Mae and Freddie Mac were placed into conservatorship, and we need reform to ensure a steady flow of housing finance to consumers, while limiting taxpayer risk.”

National Association of Realtors President Gary Thomas said the president’s plan closely mirrors a proposal presented to the Obama administration more than two years ago that maintains a government guarantee while allowing private capital to take the lead. 

“As the leading advocate for homeowners, Realtors remain steadfast in our efforts to preserve the government guarantee in any restructured secondary mortgage market to ensure the continued availability of safe, reliable mortgages such as 30-and 15-year fixed-rate loans,” Thomas said. 

“In a fully privatized market, many middle-class Americans and individuals on fixed incomes would be unable to access affordable credit or be forced into adjustable-rate mortgages pinned to interest rate variations after a limited term,” he said. 

Up until now, White House has been relatively quiet on the housing reform front, with the most notable effort coming in the form of a white paper released by the Treasury Department in February 2011, which laid out a series of options for overhauling the mortgage finance market.

Senior administration officials said during a call with reporters on Monday that the economic team has devoted plenty of behind-the-scenes time to crafting a comprehensive plan for the housing market.  

Sen. Mark Warner (D-Va.), a chief sponsor of a bipartisan plan in the upper chamber, said that “it’s good to see additional momentum to strengthen the economic recovery by addressing mortgage finance reform.”

“Our bipartisan Senate approach protects taxpayers while maintaining access to affordable mortgage credit. Our proposal also will end the current Fannie and Freddie model of private gains and public losses.”

His main partner on the bill, Sen. Bob Corker (R-Tenn.), said, “there is real momentum growing” to housing reform. Their plan would end Fannie and Freddie in five years. 

So far, nearly half of the members of the Senate Banking Committee — five Democrats and five Republicans — have signed on as co-sponsors of the legislation. 

The committee approved recently a bipartisan measure to shore up the Federal Housing Administration’s finances and put it back on stable footing to ensure credit is still available to lower-income borrowers and first-time buyers. 

The panel is expected to begin the heavy lift of putting together a plan to overhaul Fannie and Freddie in September, which will include the Corker-Warner plan, among others that are expected to emerge. 

“For too long, these companies were allowed to make big profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag. It was ‘heads we win, tails you lose.’ And it was wrong,” Obama said in his speech. 

“The good news is that there’s a bipartisan group of senators working to end Fannie and Freddie as we know them. I support these kinds of efforts.”

White House officials have said the president broadly supports the Corker-Warner plan, but has acknowledged that the measure needs to be tweaked. 

But John Taylor, head of the National Community Reinvestment Coalition, called on the president to make a “clear stand” that any overhaul of Fannie and Freddie ensure that there is access to conventional loans for the full spectrum of creditworthy borrowers of all incomes.

“The Corker-Warner GSE reform bill does not contain any such obligation,” he said. “That bill incorporates a government guarantee without incorporating a mechanism to promote access to conventional home loans for a broad set of consumers.”

Rep. Maxine Waters (D-Calif.), ranking member of the House Financial Services Committee, said that Democrats are ready to work on a plan “that protects homeowners, taxpayers, and renters and maintains the affordability of the 30-year fixed rate mortgage.” 

“Unfortunately, House Republicans have politicized housing finance reform, by passing unworkable legislation out of the committee that completely ignores the robust and substantive discussions happening among other stakeholders.”

But House Financial Services Committee Chairman Jeb Hensarling (R-Texas) argued that the president’s plan resembles the GOP-crafted legislation that his committee approved before the August recess. The plan received no Democratic support and lost of couple of Republicans on the panel. 

“Our plan puts private capital at the center of the housing finance system; ends the bailout of Fannie Mae and Freddie Mac; and sustains the 30-year fixed rate mortgage — all goals the president today says he supports,” he said. 

Housing industry stakeholders and some economists have argued that they way House bill is structured would make a 30-year mortgage inaccessible for the majority of borrowers.

The president also called on the Senate to confirm Rep. Mel Watt (D-N.C.) to head the Federal Housing Finance Agency. Watt faces Republican opposition and a floor vote on his nomination was put off until after the summer recess. 

Senate Banking Committee Chairman Tim Johnson (D-S.D.) said Watt needs to be confirmed soon for “housing finance reform efforts to move ahead.”