Sustainable Housing Finance: An Update from the Director of the Federal Housing
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January 27, 2015 at 9:26 am #4243
Hearing entitled “Sustainable Housing Finance: An Update from the Director of the Federal Housing Finance Agency”
Tuesday, January 27, 2015 10:00 AM in 2175 Rayburn HOB
Full CommitteeROOM CHANGE — This hearing will now take place in 2175 Rayburn HOB.
Click here for the Committee Memorandum.
Witness List
The Honorable Melvin L. Watt, Director, Federal Housing Finance Agency
Live Webcasthttp://financialservices.house.gov/calendar/eventsingle.aspx?EventID=398622
January 27, 2015 at 10:03 am #4244FHFA Director Watt’s Prepared testimony.
http://thehill.com/policy/finance/230756-read-fhfa-directors-prepared-testimonyJanuary 27, 2015 at 10:06 am #4245“A Republican aide said that the hearing Tuesday will give members of the panel a chance to question Watt on whether these moves are appropriate at a time when both companies lack the capital to operate without taxpayer support.”
http://www.politico.com/morningmoney/0115/morningmoney16864.html
January 27, 2015 at 10:09 am #4246The purpose of this hearing is to receive an update from the Federal Housing
Finance Agency (“FHFA”) on (1) measures FHFA has taken as conservator of
Fannie Mae and Freddie Mac; (2) FHFA’s current Strategic Plan for Fannie Mae
and Freddie Mac; (3) the current financial condition of Fannie Mae, Freddie Mac
and the Federal Home Loan Banks (“FHLBs”); (4) the current state of private sector
participation in the housing finance market; (5) whether adequate steps are being
taken to encourage additional private capital in this market; and (6) additional
actions FHFA has taken as regulator of Fannie Mae, Freddie Mac and the FHLBJanuary 27, 2015 at 10:11 am #4247Maxine Waters is expressing her feelings about missing Mel Watt on the committee because he actually read every line of the bills they talk about. Since he actually read the bills, he could come up with real questions on the bills.
January 27, 2015 at 10:13 am #4248Jeb Hensarling is saying it is “dejavu all over again”
We are forgetting the causes of the financial crisis, in his words.
January 27, 2015 at 10:14 am #4251Hensarling recognizes greed on Wall Street but also says there is greed in Washington. He is blaming the government for the financial crisis.
January 27, 2015 at 10:16 am #4252Hensarling mentions the payment of funds to the affordable housing trusts while Fannie and Freddie are excessively levered. (AGREE 100% on this point)
January 27, 2015 at 10:17 am #4253Maxine Waters SAYS THAT Fannie and Freddie have PAID BACK the government and the bailout was a resounding success.
January 27, 2015 at 10:20 am #4254Garrett is saying Fannie and Freddie were at the center of the financial crisis. He hopes to reform the system.
He is hoping to continue negotiations and get a bipartisan consensus.
January 27, 2015 at 10:21 am #4255Garrett is telling Director Watt that he is an important part of reform. This includes lowering down payments, funding affordable housing trusts, etc. He is warning Director Watt that he is responsible for increasing risks.
January 27, 2015 at 10:24 am #4256Maloney thinks that the size of a mortgage down payment does not correlate with default rates. (Possibly true, but higher downpayments mean less loss by Fannie and Freddie on defaults)
January 27, 2015 at 10:28 am #4257Director Watt is reading his prepared remarks.
http://thehill.com/policy/finance/230756-read-fhfa-directors-prepared-testimonyHe just mentioned that he wants to increase the role of private capital in the system. (He is doing this by having the companies issue risk sharing bonds.)
January 27, 2015 at 10:32 am #4258Hensarling is now opening questions…
Hensarling is focusing on the 3% down mortgages. He says he knows that the downpayment itself is not the most reliable indicator default risk. He asks if a 3% down mortgage is more risky for taxpayers than other loan types. Watt says yes.
January 27, 2015 at 10:33 am #4259Hensarling asks if 3% down is riskier to the home purchaser now. (I guess this is dependent on whether they increase the amount of leverage that they have available)
Watt says for the borrower, 3% is the same as 10%.
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