As of this writing, the Senate Banking Committee was scheduled to markup on April 29 the new bipartisan housing finance reform proposal drafted by the committee chairman and its ranking member.
The banking committee will be working from a legislative draft hammered out after months of negotiations between Chairman Tim Johnson (D-South Dakota) and Sen. Mike Crapo (R-Idaho).
On March 16, Johnson and Crapo released the legislative text of their bipartisan housing finance reform agreement.
A Senate Banking Committee press release announcing the markup stated, "Earlier this month, Chairman Johnson and Ranking Member Crapo unveiled a bipartisan housing finance reform proposal that used Senators Corker and Warner's bill (S. 1217) as the framework." The release added, "Chairman Johnson and Ranking Member Crapo's proposal is designed to protect taxpayers from bearing the cost of a housing downturn; promote stable, liquid and efficient mortgage markets for single-family and multifamily housing; ensure that affordable 30-year, fixed-rate, prepayable mortgages continue to be available, and that affordability remains an important consideration; provide equal access for lenders of all sizes to the secondary market; facilitate broad availability of mortgage credit for eligible borrowers in all areas and for single-family and multifamily housing types."
The release of this bipartisan legislative proposal from the committee leadership drew broad endorsement from industry and policy groups.
David Stevens, president and chief executive officer of the Mortgage Bankers Association (MBA), released this statement: "This is another important step in the direction of housing finance reform that ensures liquidity for residential and multifamily housing, while also limiting risk to taxpayers."
Stevens added, "At first glance, the discussion draft contains many similarities to MBA's [government-sponsored enterprise] reform principles. We are looking closely at the full text with a keen focus on the specifics around the required capital level and how it is determined, the definition and role of the guarantor/aggregator, the mutual structure for smaller lenders, as well as the proposed rule and authorities granted to the FMIC [Federal Mortgage Insurance Corporation]."
Some positives that MBA singled out about the new proposal were: an explicit government guarantee applicable to the entire security, with significant private capital bearing the first loss; a wind-down of...