Housing Finance Reform continues to be on the minds of many in Congress and in the Administration. At a May 18 Senate Banking Committee hearing, Secretary Mnuchin explained his thinking on GSE reform. On timing, the Secretary said housing finance reform would be a priority in the second half of the year. “We need to find a solution that creates necessary liquidity while making sure we don't put taxpayers at risk. And while we've been busy working on tax reform and focusing on regulatory issues, during the second half of this year I will focus on housing reform...”
Chairman Mike Crapo’s (R-ID) questions focused exclusively on housing finance reform asking the Secretary first if there should be an explicit government guarantee provided through the housing system. Secretary Mnuchin explained that it was too early for him to make a conclusion on whether a guarantee is necessary. “That is something that we would like to study very carefully and if there is a guarantee we would want to make sure that there is ample credit and real risk in front of that guarantee so that taxpayers are not at risk,” answered Mnuchin.
Senator Corker (R-TN) continued his focus on the Fannie and Freddie dividend payments issue. As NMHC reported previously, Director Watt made news last week when he floated the idea of withholding Fannie and Freddie dividend payment to Treasury to guard against potential short-term operating losses. That statement by Mel Watt, provoked a sharp exchange between Senator Corker and the Director. Secretary Mnuchin informed Senator Corker that he had spoken to Director Watt on several occasions on this specific issue. “I've had the opportunity to meet with Mel Watts several times. Last time we talked about the dividend extensively and I did tell him that it was our expectation at treasury that they would pay us the dividend and we hope they continue to do so, per the agreement.”
NMHC\NAA will continue to work with Congress, FHFA and the Treasury as discussions on housing finance reform continue to ensure that provisions critical to our industry are included in any reform.