Housing Finance at a Glance: Monthly Chartbooks
The March 2017 edition of At A Glance, the Housing Finance Policy Center’s reference guide for mortgage and housing market data, includes updated figures describing the size of the mortgage market, mortgage origination product type composition, latest agency issuance activities, and a special quarterly feature on GSE loan composition, repurchase rates, defaults, and loss severity.
The first two months of the 115th US Congress have been very active as lawmakers have pushed a number of bills pertinent to the mortgage market. Some of these bills are comprehensive, like The Financial Choice Act, which aims to provide broad regulatory relief to the financial services industry, or The Repeal CFPB Act, which would eliminate the Consumer Financial Protection Bureau. Other bills are more incremental in nature. These include The Taxpayer Protections and Market Access for Mortgage Finance Act of 2016, which would require the GSEs to increase their credit risk transfer with the private sector, or The Credit Score Competition Act, which would require the GSEs to evaluate multiple credit scoring models in an effort to improve the acceptance of alternative credit scores as a way to make credit more accessible.
Although bigger pieces of legislation such as the Choice Act or the CFPB Repeal Act would result in major changes for the financial services industry and housing finance in general, their likelihood of becoming law in the near term, given their complexity and lack of broad support, is much lower than that of the incremental bills. On the other hand, narrower bills targeting smaller, less controversial issues may find easier to garner necessary support. The Taxpayer Protections and Market Access for Mortgage Finance Act is one such bill. Attracting more private capital to the mortgage market and reducing taxpayer risk are two key areas of agreement when it comes to the future of housing finance. Any bill that increases private-capital backed financing for home mortgages thus has one less hurdle to overcome.
Similarly, proposals facilitating greater use of alternative credit scores are less likely to run into major political opposition. The Credit Score Competition Act would not only require the GSEs to explore ways to safely extend credit to responsible borrowers who lack traditional credit scores, but would also help improve competition in an industry otherwise dominated by traditional credit scores.
Still, given the polarized state of American politics, there can be no assurances that even seemingly uncontroversial proposals won’t ultimately get caught up in the legislative quagmire. Therefore regardless of which bills, if any, ultimately are passed or the form in which they are passed, only one thing seems certain: legislative uncertainty is likely to loom on the horizon in the foreseeable future.