The return of private capital must be the dominant source of mortgage credit and bear the primary risk in any future housing finance system said more than a dozen financial and housing trade groups in a report published last week.
“As policymakers debate options to restore vitality, integrity and stability to the secondary mortgage market, including an appropriate role for the federal government in supporting homeownership and rental housing, it is essential that care is taken in weighing the choices ahead,” said the Mortgage Bankers Association. “The policy decisions in this area will have profound implications for the nation’s economic recovery and for generations of future homebuyers and renters, with broad ranging social and economic consequences.”
The groups believe a stable housing sector is essential for a robust economic recovery and long- term prosperity. In addition, they ask for a continuing and predictable government role to promote investor confidence and ensure liquidity and stability for homeownership and rental housing.
Last, private capital is critical for the market and the current government-dominated mortgage system is neither sustainable nor desirable. However, investors must be confident that they understand the risks and rules that can affect them.
“As policymakers move forward with Dodd-Frank Act rule-makings and similar regulatory efforts, it will be important to provide clarity and certainty to the marketplace in a manner that promotes recovery and growth,” said the report. “As such, the future mortgage system should seek to ensure a workable balance between sound underwriting principles, consumer protection and the need for responsible innovation and risk-taking.”
The groups committed to being part of these goals include:
American Bankers Association
American Financial Services Association Community Mortgage Banking Project
CRE Finance Council
Housing Policy Council of the Financial Services Roundtable
Independent Community Bankers of America
Manufactured Housing Institute
Mortgage Bankers Association
Mortgage Insurance Companies of America
National Apartment Association
National Association of Home Builders
National Association of Realtors
National Council of State Housing Agencies
National Multi Housing Council
Real Estate Roundtable
Securities Industry and Financial Markets Association