WASHINGTON (UPDATED, 7/23/13, 3:54 p.m. ET)--Credit Union National Association Chief Economist Bill Hampel, testifying this afternoon at the Senate's first hearing this year on housing finance reform, will note credit unions appreciate the need to reform the current housing finance system, but any reforms must not hinder the ability of credit unions to meet their members' housing finance needs in a member-friendly cooperative way.
Hampel, the credit union witness for the Senate Banking subcommittee on securities, insurance and investment members hearing entitled "Creating a Housing Finance System Built to Last: Ensuring Access for Community Institutions," in part discusses S. 1217, a secondary mortgage market reform bill recently introduced by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.). Other co-sponsors include Sens. Mike Johanns (R-Neb.), Jon Tester (D-Mont.), Dean Heller (R-Nev.), Heidi Heitkamp (D-N.D.), Jerry Moran (R-Kan.) and Kay Hagan (D-N.C.).
"CUNA believes that S. 1217 is a positive step towards creating a sustainable and affordable housing market," Hampel emphasizes in his remarks.
"CUNA appreciates the attention this subcommittee is giving to housing finance reform," and "credit unions need equal and fair access to a secondary market for lenders of all sizes that will ensure affordable mortgage products for our members," Hampel adds.
However, he said, there are a number of principles that CUNA hopes a new housing market finance system will accommodate. Those principles include:
Maintaining a strong regulator with rigorous market oversight to ensure safety and soundness, system standardization and equal access;
The ability to retain servicing rights when mortgages are sold on the secondary market;
Ensuring that even in troubled economic times, mortgage loans will continue to be made to qualified borrowers;
Emphasizing consumer education and counseling as a means to ensure that borrowers receive appropriate mortgage loans;
Maintaining consumer access to products that provide predictable, affordable mortgage payments to qualified borrowers, such as the 30-year fixed rate mortgage; and
Setting reasonable conforming loan size limits that adequately take into consideration variations in local real estate costs.
Overall, Hampel says, the transition from the current system to any new housing finance system must be reasonable and orderly, and the transition deadline needs to be flexible.
The hearing is taking place as the House Financial Services Committee today marks up its own housing finance reform bill, the Protecting American Taxpayers and Homeowners (PATH) Act (H.R. 2767).