To update observations on the housing market and foreclosures, on October 8 2009, the Senate Banking Committee held a hearing "Future of the Mortgage Market and the Housing Enterprises" to talk about the state of the mortgage market, changing regulations, the future of Fannie Mae and Freddie, the Federal Housing Finance Agency. The federal government is supplying over $1 trillion to the mortgage market.
Chairman Christopher Dodd (D-CT) outlined goals for the mortgage market and housing enterprises: (1) the mortgage market must remain liquid and stable; (2) encourage product standardization and widespread availability of 30 year fixed rate mortgages without prepay penalties; (3) mortgage credit must remain available, accessible, sustainable.
Testifying at the hearing were: Edward J. DeMarco , Acting Director for the Federal Housing Finance Agency; William Shear, Director, Financial Markets and Community Investment, U.S. Government Accountability Office; Andrew Jakabovics, Associate Director for Housing and Economics, Center for American Progress Action Fund; Susan M. Wachter, Worley Professor of Financial Management, Wharton School of Business, University of Pennsylvania;
Peter Wallison, Arthur F. Burns Fellow in Financial Policy Studies, American Enterprise Institute.
Meanwhile, also on October 8, 2009, the House Financial Services Committee's Subcommittee on Housing and Community Opportunity held a hearing entitled, "The Future of the Federal Housing Administration's (FHA) Capital Reserves: Assumptions, Predictions and Implications for Homebuyers." Due to a decline in long-term interest rates and the tax credit for first-time homebuyers, housing prices are stabilizing nationally. The tax credit stimulated demand, with about 1.6 million of the 3.9 million homes sold through mid-September 2009 to first-time homebuyers.
Subcommittee Chair Maxine Waters (D-CA) expressed that the FHA has emerged as an alternative to the sub-prime mortgage market. FHA recently announced its capital reserve ratio is predicted to decrease below the congressionally mandated threshold of two percent. Presumably, the FHA expects higher net losses than previously estimated on outstanding loan guarantees, over the next thirty years and more than currently reserved in the financing account.
Testimony at this Committee came from: David Stevens, Assistant Secretary for Housing and Federal Housing Administration (FHA) Commissioner, U.S. Department of Housing and Urban Development; Patrick Newport, U.S. Economist, IHS Global Insight; Edward Pinto, Real Estate Financial Services Consultant; Boyd Campbell, Member, Executive Board of the Maryland Association of Realtors, GSE Presidential Advisory Group, National Association of Realtors (NAR); David Kittle, Chairman, Mortgage Bankers Association (MBA); John L. Councilman, CMC, CRMS, Federal Housing Committee Chair, National Association of Mortgage Brokers (NAMB); Peter Bell, President, National Reverse Mortgage Lenders Association (NRMLA); Teresa Bryce, President, Radian Guaranty Inc., Mortgage Insurance Companies of America.
