Among the ways the American Securitization Forum would like to see private capital return to the housing market is by way of more increases in guarantee and premium fees for agency and government loans.
The group in a new set of policy proposals also is calling for lower government and agency loan limits and agency risk sharing.
These are part of a first set of steps the group suggests in a white paper as a means of establishing more of “a level playing field” for private capital and the agencies.
In a second set of proposals, the group suggests taking steps “to address the uncertainty surrounding final rules relating to risk retention, conflicts of interest, Regulation AB II and Basel III.”
These include aligning criteria for qualified mortgage and qualified residential mortgage rules, categorizing QM loans as Category 1 loan in risk-based capital rules, eliminating QM provisions that favor government-sponsored enterprise execution, and eliminating “after the fact rule changes” for private-label residential mortgage-backed securities.
The group also suggests establishing a
“Everyone agrees the government’s role in housing finance should be reduced long-term, however, there’s little consensus on what should be done,” said Tom Deutsch, executive director of the ASF, in a press release. “Finding a permanent policy solution may take many years, so we have to put together a concise set of policy proposals that can be implemented near-term to expedite the process of bringing private capital back to the mortgage market with…a focus on incrementally bringing down government involvement to well below current levels.”
The federal government directly or indirectly still guarantees about 90%-95% of new U.S. mortgage originations, according to the ASF.
