Royce Discusses Housing Finance Reform at Milken Conference
Washington, D.C. – (RealEstateRama) — U.S. Representative Ed Royce (R-Calif.) participated in a panel discussion entitled “How To Restart the Private Market for Mortgage Credit” during the Milken Institute Global Conference.
Participants included former Federal Housing Finance Agency Acting Director Edward DeMarco, U.S. Mortgage Insurers President and Executive Director Lindsey Johnson, and PennyMac Financial Services CEO Stanford Kurland.
The panel was tasked with assessing the progress to date with the GSEs’ credit risk transfers and exploring the conditions necessary for a restoration of a deep and liquid market for mortgage credit risk backed by private capital rather than taxpayers.
An excerpt of Rep. Royce’s remarks as prepared for delivery is below:
“I support an all-of-the-above approach: Congress should encourage an increase in both the amount and the types of risk-transfer transactions to the maximum amount that is economically and commercially viable. This would include both back-end and front-end risk sharing. We also have to figure out how to promote risk-transfer transactions that allow access to all types and sizes of mortgage originators. A role for the Federal Home Loan Banks in facilitating risk sharing transactions involving small lenders should be explored. The goal of Congress should be ensuring the maximum transfer of risk away from taxpayers and the GSEs.
“The good news is that we have come a long way, and I think my colleagues on both sides of the aisle have learned from the past. We have agreement that the prior model of private gains and public losses is a failed model. There is disagreement on the role of the federal government as a backstop. Where does that leave us? I have been advocating for a few years that we can move forward even with this disagreement on the end state. Building block reforms are possible. The low-hanging fruit would be moving forward with legislation creating a truly common securitization platform and encouraging more risk-sharing.Both of these ease the path for future comprehensive housing finance reform. I’m focused on seeing these specific initiatives enacted while moving the ball forward on comprehensive reform. Any reform effort needs to both protect the American taxpayer and ensure a robust housing market in order to win my support.“
Rep. Royce is a senior meContact: mber of the House Financial Services Committee, with membership on both the Capital Markets and Government Sponsored Enterprises and Housing and Insurance Subcommittees.
Saat Alety (202-225-4111
Source: U.S. Representative Ed Royce
