The first half of the Regulatory Issues Forum during the REALTORS® Legislative Meetings & Trade Expo featured an interview between Bethany McLean, contributing editor for Vanity Fair Magazine, and Mark Calabria, who was recently confirmed by the U.S. Senate to head the Federal Housing Finance Agency (FHFA).
The National Association of REALTORS® supported Calabria during the confirmation process, and his remarks at the forum showed that support to have been well placed.
McLean kicked things off by sharing a few stats that demonstrate why housing, and particularly the 30-year mortgage, is so important to not only REALTORS® and our clients, but to the American economy in general. The 30-year mortgage allows for economic mobility—without it, buying and selling a home would be more difficult.
People’s ability to sell their home, move to a different part of the country, and buy a new home is critical to the nation’s employment base. This ability to easily transfer in order to pursue employment opportunities allows companies to recruit the best talent to fit their firm’s needs.
The first question to Calabria focused on the role of the 30-year mortgage in the U.S. housing market, and Calabria expressed a strong commitment to maintaining it as an integral part of housing finance.
The FHFA is responsible for overseeing the Government Service Enterprises (GSEs), Fannie Mae and Freddie Mac, that play a role in nearly two-thirds of all home loans originated in the U.S. The GSEs have been in conservatorship since the financial crisis.
Calabria outlined three steps critical steps that would need to be taken, before the GSEs could move out of conservatorship. First, Congress would need to stop “sweeping” the profit from Fannie and Freddie and allow both companies to begin the process of recapitalizing.
Second, a better regulatory system needs to be created to make sure the problems that led to the financial meltdown do not occur again.
Finally, management of Fannie and Freddie need to make a commitment to ongoing transparency and responsibility.
Calabria did not want to dictate a specific timeline for each step, but rather set a roadmap forward. Overall, it was a very informative presentation and a great dialogue about an important issue in our industry.