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WE’RE HEARING that a new housing reform proposal developed by a private bipartisan commission will be very kind to the FHA mortgage insurance program.
The commission’s proposal, to be released Feb. 25, which will address a wide range of issues from affordable housing to tax policies, is expected to be supportive of FHA’s role in helping first-time and minority homebuyers.
This proposal comes as House and Senate Republicans are beating up on FHA officials. The GOP lawmakers argue that FHA should have conserved its capital instead of continuing to provide mortgage credit in the aftermath of the housing bust.
But it is easy to see why FHA and its countercyclical role would have so much support on the 21-member commission—it is stacked with former Federal Housing Administration and Department of Housing and Urban Development officials.
Two of the four co-chairs of the Bipartisan Housing Commission are former HUD secretaries—Mel Martinez and Henry Cisneros. The third co-chair—Sen. Christopher Bond—was very supportive of FHA’s multifamily programs while in the Senate. The fourth co-chairman is former Senate majority leader George Mitchell. Mitchell founded the Bipartisan Policy Center, which sponsored the housing commission.
Two commissioner members were FHA commissioners—Nicolas Retsinas and Ronald Rosenfeld. And Robert Couch was president of Ginnie Mae.
This Bipartisan Housing Commission is slated to release its report Monday (Feb. 25) morning.
Sources indicate the BHC proposal will leave the FHA program largely intact so it will be around to soften the blow in the next housing crisis.
And it calls for the creation of a secondary mortgage entity that will eventually assume Fannie Mae and Freddie Mae’s secondary market role.
But in the good times, the commission wants the private sector to be the dominant player in the mortgage market.
SHOUT OUT: We’ve been giving shouts out each week to any mortgage-related firm that adds ten net new hires. That’s because we see this as the way the industry (and national) economy gets out of a tepid recovery—private sector hiring. (Consumers are still wary about adding credit and government, believe it or not, has convinced itself austerity is the way to go.). At the Mortgage Bankers Association’s servicing meeting this week in Dallas, Loren Morris, SVP of Retreat Capital Management, an advisory services firm, said his firm grew 200% last year and had “many more” than 10 net new hires. Good work, and it keeps the streak going—we’ve found a “net plus ten” mortgage firm each week since we started the blog in December. Morris also told us that Retreat may become a servicer this year, on the specialty side.
UGLY PILLS: We’re champions of the First Amendment here and are never in favor of outside censorship. But self-censorship is another concept, and a virtuous one. So if our friends at Mortgage Grapevine would stop referring to each other in language that would make subprime lenders blush and stop referring to President Obama in racist terms, we think the political discourse would be greatly improved. And as an example of our own self-censorship, we are NOT going to provide a link to the thread that inspired these thoughts. Instead, try this one.
EQUAL TIME: Blogger Garth Graham may have ruffled a few feathers with his latest blog comparing mortgage industry management to the management of the Dallas Cowboys, a team he doesn’t much like. (The connection? Garth was heading to the MBA servicing show in Dallas.) So in the interest of being fair (and we ourselves are from New York and have no dog in this hunt) we’re going to say a couple of nice things about the Cowboys (you can decide for yourself whether they are applicable to mortgage management). The Cowboys’ marketing tag “America’s Team” is brilliant, even though, as Garth points out, the Cowboys’ success in the post-season has been spotty. Let’s call it an aspiration instead. And if imitation is the greatest form of flattery, the Cowboys’ cheerleaders have to be the most lionized bunch in cheerleading history. As for the Redskins, a team Garth much prefers to the Cowboys, let’s not forget that “Redskins” is a racist term (it refers not to American Indian skin color but to the bloody scalps of Indians bounties would be paid on). It’s about time the DC team had a more appropriate name. How about the Sequesters? And now, on to homebuilding (baseball) season…
Mark Fogarty is editorial director of the SourceMedia Mortgage Group and has been commenting on the mortgage market since 1984. Brian Collins is the group’s senior editor and D.C. bureau chief. He has worked the mortgage beat since 1988.
