Secondary and primary market representatives at the Mortgage Bankers Association’s secondary market conference Wednesday morning said their concerns about governmental changes like GSE reform and Dodd-Frank largely center on their potential to tighten mortgage credit availability and exacerbate a still-struggling housing market.
“The focus…is not to constrain credit,” Jeff Foster, the Treasury’s senior policy advisor-capital markets told attendees at gathering. Foster said the government wants to hear industry concerns as it proceeds at a deliberate pace on big moves like GSE reform.
Tom Deutsch, executive director of the American Securitization Forum, told ASR sister publication National Mortgage News that it might be best for there not to be a rush to reform because of the pressure it could put on mortgage rates and housing.
Removing the effective subsidy the agencies’ guaranty fees put on rates and adding to secondary market costs by, for example, adding loan-level transparency, means rates will inevitably rise as reform occurs, he said. This could cause housing demand to continue to decline.
“Mortgage rates will go up. There is no doubt in my mind,” Deutsche said during a panel discussion at the conference.