President and CEO David Stevens of the the Mortgage Bankers Association (MBA) recently testified before the House Financial Services Subcommittee on Capital Markets and the Government Sponsored Enterprises.
Commenting on the proposed Private Mortgage Market Investment Act, Stevens stated he approves of the bill's goal of promoting the role of private capital as the primary source of liquidity in the mortgage market and establishing a sustainable real estate finance system.
He also supported the provisions which would allow the Federal Housing Finance Agency to develop standard mortgage securitization agreements, noting it helps investors measure their risk exposure and promotes predictability and reliability. He was not in accord with the entire bill, however.
"I also want to comment on the bill’s repeal of Dodd-Frank’s risk retention requirements, a key issue for our residential and commercial members," said Stevens. "Risk retention is a well-intended means for better aligning the interests of mortgage market participants and MBA was the leading advocate for establishing an exemption for safer Qualified Residential Mortgages. Regrettably, the proposed rule, with its QRM definition and creation of a Premium Capture Cash Reserve Account, is so deeply flawed that we seriously question whether it reflects congressional intent or can ever be successfully implemented."
Overall, Stevens seemed positive about most of the provisions he addressed. He responded favorably, for example, to provisions that would establish different classes of mortgage products and clarify financing options for consumers.