Mortgage Bankers Association officials believe the market is improving but not fast enough, and a move toward government-sponsored enterprise reform needs to happen while refinancing is ensuring a liquid market.
“We are making progress,” MBA chair Debra Still told attendees at the group's national secondary market conference in New York. However, liquidity remains a challenge, particularly at the lower end of the consumer market, even as the higher end grows, she said.
The government's role in the market remains too large at close to 90%, said Still, noting that this is why the association convened its task force on the future of the secondary market and has been seeking to draw up a “roadmap for transition,” where the private market bears most of the credit risk in the conventional market but a government backstop persists for the lower end of the market focused on ensuring the payment of principal and interest on mortgage-backed securities.
Still said a priority goal for the association is “broad access to capital for qualified borrowers.”
The move away from government involvement in the market needs to happen soon and not be limited to talk,
“We're being heard” by government officials when it comes to this and other developing regulation, but “being heard is not enough,” he said.
“We need to step forward,” Stevens said, emphasizing some key moves the group is pushing for. These include a housing policy coordinator in Washington to help navigate the increasingly complex and sometimes overlapping rulemaking in the market. Also the group is seeking “transparency” and “three quick steps” toward reform of government involvement in the market. These are a common agency security, front-end risk sharing that keeps the agencies focused on catastrophic risk, and a viable use of the agencies' securities platform.
The industry needs to do this now while refinancing is keeping the market liquid, Stevens said. Otherwise, he said, “We're not going to get this done.”
