Committee Holds Hearing on FHFA Actions to Protect Homeowners and Renters During Pandemic
September 16, 2020 -
Today, the House Committee on Financial Services is holding a virtual hearing with the Director of the Federal Housing Finance Agency (FHFA), Dr. Mark Calabria, to discuss the agency’s response to the coronavirus economic and public health crises, and the proactive steps taken by FHFA to protect renters and homeowners.
Watch Ranking Republican Patrick McHenry’s (NC-10) opening remarks here.
Ranking Republican McHenry’s opening remarks as prepared for delivery:
“Director Calabria, thank you for testifying today.
“I’d like to start with some basics. Combined, Fannie Mae and Freddie Mac guarantee or own a portfolio of roughly 28 million single-family and multifamily mortgages, for a value of approximately $5.7 trillion.
“That’s nearly half of all outstanding mortgage debt in the United States.
“Early on, there was concern about what the pandemic might mean for homeowners and whether our housing markets could withstand the impact.
“Under your leadership and decisive action FHFA confronted the challenges head on.
“In March, FHFA started issuing statements to mortgage servicers about their responsibility to ensure ‘hardship forbearance is an option for borrowers who are unable to make their monthly mortgage payment.’
“On March 18th, FHFA went further and suspended foreclosures and evictions for its single-family mortgages for at least 60 days.
“That was nine days before Congress enacted the CARES Act, which codified those two FHFA policies.
“The result of FHFA’s leadership could not be clearer.
“In February, the GSEs had about 580,000 delinquent loans, or about 2 percent of its portfolio. Approximately 9,000 were in some stage of foreclosure.
“Today, the delinquency rate had almost tripled because of the pandemic. Yet, loans in forbearance are just under 5 percent, and the number of foreclosure sales fell to just 97 in May.
“It’s clear, these policies have worked to protect American homeowners impacted by the pandemic.
“In August, FHFA announced it was going to extend its foreclosure and REO eviction moratoria through at least December 31st.
“However, these pandemic-related actions, and others, come at a cost. FHFA projected these costs in August to be at least $6 billion to the GSEs.
“That’s a concerning figure.
“What is more concerning was FHFA’s poorly explained roll out in August of a new Adverse Market Fee.
“The way this was announced and the initial three-week timing for its implementation doomed it from the start.
“Clearly, FHFA has a statutory obligation to ensure the GSEs operate in a safe and sound manner with sufficient resources to meet their obligations.
“That’s in the 2008 law that created FHFA, a law that Chair Waters and all 11 other current Committee Democrats who were in Congress at that time supported.
“But, this last-minute fee on mortgage refinancings rightfully received bipartisan scrutiny.
“I’m pleased that FHFA understood our concerns and revised the fee to protect homeowners with loan balances below $125,000 and delayed the implementation date until December.
“That’s a good example of how this process ought to work. Congress relying on FHFA to make smart decisions regarding the pandemic, and FHFA listening to Congress and responding to balance protecting America’s homeowners with its legal requirements to supervise the GSEs.
“When you testified before the Senate in June, you said you were ‘proud of what FHFA has done to help borrowers, renters, and the housing market deal with this crisis [but] FHFA recognizes that more work remains. The crisis caused by COVID-19 is not over.’
“I think we can all agree on that.
“I thank you for your leadership and efforts throughout this pandemic.”
Watch the virtual hearing live here.
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