NAR’s Malta Tells Congress Housing Finance Reform Must Be Bipartisan
Real Estate In-Depth | December 26, 2018
WASHINGTON—On Dec. 21, National Association of Realtors President-Elect Vince Malta testified before the House Financial Services Committee. During the hearing, “A Legislative Proposal to Provide for a Sustainable Housing Finance System: The Bipartisan Financing Reform Act of 2018,” Malta, a third-generation Realtor and the CEO and broker of Malta & Co., Inc. in San Francisco, commended the committee for its work toward comprehensive reform of the nation’s housing finance system.
In his testimony Malta outlined NAR’s priorities for a legislative restructuring of Freddie Mac and Fannie Mae and its positions on the three main components of Committee Chairman Jeb Hensarling’s bill—the Bipartisan Financing Reform Act of 2018.
“NAR believes the discussion draft contains many provisions that should serve as the backbone for comprehensive housing finance reform. These components include an explicit government guarantee, regulatory flexibility and strong and reasonable regulatory authority,” said Malta, who has more than 43 years of experience in the real estate industry. “However, as the discussion draft evolves, the proposal can be improved to further ensure a reliable and affordable source of mortgage capital is readily available for responsible creditworthy Americans in all types of markets.
“Above all else, NAR firmly believes that comprehensive housing finance reform must be done in a bipartisan manner,” he said.
Along with Malta, representatives from the National Association of Home Builders, Mortgage Bankers Association, and the National Association of Federal Credit Unions were invited to participate in the Financial Service Committee hearing.
“The National Association of Realtors commends Chairman (Jeb) Hensarling (R-TX) for his hard work in the effort to reform America’s housing finance system,” said NAR Senior Vice President of Government Affairs Shannon McGahn. “Specifically, we strongly support this proposal’s language to provide an explicit government guarantee for mortgage-backed securities, which will provide countercyclical protections and pricing benefits to American consumers. Most importantly, any reforms must provide liquidity and promote stability in the national housing market, particularly during times of economic distress.”
Despite structural and fundamental improvements to the housing industry since the financial crisis, NAR has argued that the current conservatorship of Fannie Mae and Freddie Mac needs to be reexamined. Realtors also have held that policymakers must address the mounting challenges facing the secondary mortgage market, which could have a severe impact on taxpayers and on Americans’ ability to access affordable mortgage credit.
In order to minimize the effects of these threats, NAR has been urging Congress to enact comprehensive housing finance reform legislation, which will be the focus of NAR’s Policy Forum on Feb. 7, 2019, in Washington, D.C. Industry experts, academics, and policymakers will all speak at the event as NAR continues to lead discussions on opportunities facing the housing finance system and offer sensible reforms for the future.
“While the housing market has generally improved since the financial crisis, there remains a need for policymakers to address challenges that may arise in another economic downturn,” Malta said today. “NAR urges lawmakers to pass comprehensive housing finance reform. Thoughtful reform of the secondary mortgage market will not only safeguard the interests of taxpayers, but also ensure for a deep and affordable mortgage market for all creditworthy Americans,” Malta concluded.
The National Association of Home Builders also commended House Financial Services Committee Chairman Hensarling in its testimony before the committee for working with lawmakers across the political aisle to develop a legislative framework to move housing finance reform forward.
“We support many aspects of the Bipartisan Housing Finance Reform Act of 2018, and are especially pleased that the draft legislation includes an explicit government backstop that assures market participants that the federal government will maintain stability, keep credit flowing and make investors whole in catastrophic circumstances,” NAHB CEO Jerry Howard said in testimony before the House Financial Services Committee.
“NAHB believes an explicit federal government guaranty is particularly important to the continued availability of the 30-year fixed-rate mortgage, which has been a staple of the U.S. housing finance system since the 1930s, and we appreciate that the preservation of the 30-year mortgage is emphasized in this draft bill,” Howard added.