Quinn made the following remarks before the committee:  

“Fannie Mae and Freddie Mac – the ‘GSEs’ – are critically important to mortgage financing.  MBA strongly supports the role the GSEs play in maintaining and improving liquidity and stability in the secondary mortgage market.  For these reasons, MBA has long advocated regulatory reform to ensure the GSEs are operating in a safe and sound manner, engaging in activities consistent with their charter purposes, and are subject to reasonable affordable housing goals that do not distort the market.

 “There seems to be general agreement on the fundamental tools the new regulator will need.  MBA is particularly interested in the powers of the regulator related to the review and approval of GSE activities, ongoing and new.    The new regulator should be given the explicit authority and direction to ensure the GSEs’ activities are permitted by their charters and other applicable law.

“MBA maintains the GSEs’ portfolios are important tools that augment their ability to help stabilize mortgage markets and encourage affordable housing.  Because markets are dynamic, the GSEs need flexibility to adjust their portfolios in response to changing conditions and marketplace needs.  Similarly, the GSEs’ regulator also must have sufficient flexibility to adjust to changes in the GSEs’ risk profile or other market circumstances as it regulates GSE portfolios.  The House-passed bill’s treatment of portfolio regulation is consistent with MBA policy. 

“Another important tool is the ability of the regulator to set and adjust minimum and risk-based capital levels for the GSEs.  MBA supports a flexible, bank-like regulator approach to capital regulation. 

“Finally, Congress should strengthen both the secondary mortgage market and the Federal Home Loan Banks by expressly affirming the Banks are authorized to securitize mortgage loans.”

A copy of Quinn’s full written testimony can be found at www.mortgagebankers.org

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:  www.mortgagebankers.org.