The NFL playoffs were on most securitization players’ minds when ASF 2012 started yesterday afternoon. The annual conference is being held this week in Las Vegas.
Some speakers at the different panels kept their audiences updated on how the Baltimore Ravens were scoring against the New England Patriots. Large screens at the exhibit hall were showing the game as well.
At the welcome reception sponsored by VantageScore yesterday evening, ABS players’ attention was riveted to the big screens that showed the game that will bring the New York Giants to this year’s super bowl.
Even Congressman David Schweikert (R-AZ), who addressed the late afternoon ASF 2012 crowd, asked what people were doing at his talk when the playoffs were happening. Schweikert is the vice chairman of the financial services subcommittee on capital markets and the GSEs in the U.S. House of Representatives.
However, despite the distraction of the games, the session where Schweikert and Congressman Ed Royce (R-CA) gave their featured addresses was well attended. Royce is a senior member of the financial services committee in the House.
In his address, Schweikert appealed to securitization players present at the session to share with their respective government representatives ideas on how to solve the different problems surrounding housing today. GSE reform, re-starting the private-label market and dealing with the different Dodd-Frank Act rules were some of the issues he raised.
He said that every time “you start to realize you’re making progress, there is something else that is uncovered.”
Schweikert, a proponent of bringing back private capital into housing finance, said that there are certain government policies today that go against this goal.
He cited the recent increase of GSE guarantee fees by 10 basis points beginning April 1. The purpose of the hike was to fund the Temporary Payroll Tax Cut Continuation Act of 2011 that was passed by the House and Senate and signed by President Obama on Dec. 23.
He likened this move to funding medical services with cigarette sales. The government is using GSE income to fund the tax cut yet “at the same time wants to pull back from mortgage securitization.”
In a separate interview with ASR, Schweikert also expressed his views on reinstalling Federal Housing Administration (FHA) higher conforming limits. He said that this move once again discourages private lenders from coming in. “A lender that would have considered lending to a borrower with a 5% down payment and mortgage insurance might have backed out” because the FHA has this part of the market covered.
Schweikert believes also that the GSEs should be selling the nonperforming loans that they own to different private lenders “who can be more creative” about servicing these loans.
“I don’t believe the GSEs in a monolithic way can service these loans,” he stated, adding that each state will have different rules on servicing. This might be why, he said, national programs such as the Home Affordable Refinance Program have not been as effective.
Meanwhile, in his speech, Royce also talked about the importance of “slowly easing the private sector back in while slowly easing the government out.” He called the GSEs a $300 billion failure that the U.S. created with nothing to show for it compared to other industrialized nations.
