May 24 2012
U.S. Senator Richard Shelby (R-Ala.), ranking Republican on the Committee on Banking, Housing and Urban Affairs, today made the following statement at a hearing on housing finance reform.
Statement of Senator Richard C. Shelby
Committee on Banking, Housing and Urban Affairs
May 24, 2012
“Thank you, Mr. Chairman.
“Today’s hearing is focused on legislation that would expand the Federal Housing Finance Administration’s Home Affordable Refinance Program. The program, commonly referred to as HARP, is designed to enable the refinancing of mortgages for underwater borrowers with GSE loans. While this is an important area to explore, it should be only one aspect of a broader debate.
“Our fragile housing market faces numerous challenges. The uncertainty created by the nearly four-year conservatorships of Fannie Mae and Freddie Mac is one such challenge. The resulting lack of clarity in the secondary market is a major impediment to private capital returning to our housing finance system. Without that capital, it will be difficult to have a sustainable recovery in our housing market.
“New statues and rules created by Dodd-Frank are also proving problematic. The potential consequences of rules pertaining to Qualified Mortgages or QM and Qualified Residential Mortgages or QRM have drawn concerns from industry participants and consumer groups, alike.
“FHA has also been woefully neglected. For years, FHA has severely misjudged the risk to which the taxpayer has been exposed making a taxpayer bailout a real possibility. Despite these past mistakes, however, we can take steps to help the market move forward if we honestly assess our current situation. Today’s hearing is a good first step in that direction.
“Thank you, Mr. Chairman.”