Congressional Leaders Insist Housing Bill Remains Priority

Both houses of Congress are agitating to move the stalled bipartisan housing bill.

Congress wants to pass the bill, Arkansas Rep. French Hill, Republican chair of the House Financial Services Committee, told members of the Mortgage Bankers Association during an advocacy gathering in Washington, DC, on Tuesday.

“What I’m working on with my good friend Tim Scott is, how do we have a process where we can get the best of those bills together?” Hill said, referring to the Republican senator from South Carolina, who chairs the Senate Banking Committee. “We want this bill to be an overwhelming success that adds to the housing supply.”

“I remain optimistic,” Hill said. But he did not give a timeline on when the two chambers could begin reconciliation. That must happen before President Donald Trump signs the bill.

Hope for stalled housing bill

Hill was one of the driving forces behind the bipartisan 21st Century Road to Housing Act. The House and Senate each passed a version of the multipart housing bill. Hill and others have said they must reconcile concerns with the bill. But it has been gridlocked among other priorities on Capitol Hill.

The MBA is one of several prominent business organizations that have come out in opposition to the Senate bill’s proposed ban on institutional investors that own over 350 homes. CEO Bob Broeksmit told members the bill would “ironically restrict the flow of capital into rental housing.”

Nevada Sen. Catherine Cortez Masto, a Democratic member of the Senate Banking and Finance committees, told the MBA she was willing to see changes to that component. The investor ban language is unique to the Senate version.

“I understand it, I do have reservations about the caps on institutional investors in the bill,” Cortez Masto said. “If we can tweak it and get it back from the House, I’m all for it. But I also want to say there are so many things in the bill that we just have to get it done.”

The bankers are set to meet with members of Congress on Wednesday. The MBA says it has other concerns with the bill. The group says a measure that amends the FHA’s Informed Consumer Choice Disclosure to allow price comparisons will be costly to implement, and a measure for the FHA to cover foreclosure counseling for other government programs is unwise.

Basel III rework

Hill also said a recent move by the Federal Reserve to examine loosening the capital rules for banks “will get a robust look” by Congress.

Fed leaders unveiled that plan last month, aiming to amend the Basel III accords. Put in place after the Great Recession, those rules intend to prevent another financial collapse by requiring banks to hold ample reserves. Fed leaders argued the rules had saddled small banks with requirements that chased them out of mortgages.

Hill and other members of the House agree. He said he was not a fan of the Basel framework’s prior iterations from the start. Updates should make it easier for community lenders to return to the market.

“I hope that we have a more common sense approach to treating mortgage services rights,” Hill said. “They (mortgages) really are a natural extension of the (banking) business. If you don’t want to be in the business, don’t be in the business. But we forced people out of it through no mismanagement on their part.”

Calming fears about Fannie and Freddie IPO

Broeksmit also said the MBA has concerns about ending the conservatorship of Fannie Mae and Freddie Mac.

Trump’s recent moves involving the two entities, including directing them to make large orders of mortgage-backed securities as a lever to inject more capital into the mortgage market, show his administration sees the benefits of the conservatorship, Broeksmit said.

“We are reassured the administration remains opposed to actions that will raise long-term interest rates or undermine home values,” Broeksmit said.

Hill said Congress would want a say in changing their status. “It’s not a memo and it’s done,” Hill said.