The United States just concluded an electoral campaign season that involved the expenditure of billions of dollars and resulted in no change in the balance of power on the federal level, beyond strengthening Democrats’ control in the U.S. Senate. But that doesn’t mean nothing important is going to happen over the next four years. Securitization industry officials, Washington insiders, political observers and policy wonks all expect hard financial realities to compel policymakers into responding to a host of issues that will significantly affect housing finance and securitization. “We don’t think the ‘status-quo election,’ as some have called it, means status quo for residential mortgage finance,” said Karen Shaw Petrou, a managing partner at Federal Financial Analytics, a Washington, DC, think tank. She thinks...

Complicating the post-election process of regulatory implementation is the expectation that a number of top officials at key agencies are likely to move on during President Obama’s second term. For the mortgage finance industry, perhaps the most notable potential departure among administration officials is that of Treasury Secretary Tim Geithner. Geithner has dropped hints more than once this past year that he wants to move on. Treasury officials did not respond to requests for confirmation of that as of press time. Other key officials on the industry’s departure watch list include...

There is substantial risk that the FHA may end up with a negative net worth, which would require congressional appropriations for the mortgage insurance fund and passage of legislation reforming the FHA, said a former top official at the Department of Housing and Urban Development. In remarks this week at the Urban Institute, John Weicher, former assistant secretary for housing and FHA commissioner in 2001-2005, said it is very unlikely in this weak economic recovery to see ...

Mortgage market watchers should expect “business as usual” from a second Obama administration as the White House and Congressional Democrats are poised to preserve gains under the Dodd-Frank Act, including the Consumer Financial Protection Bureau. Both parties say they want to resolve the conservatorships of the government-sponsored enterprises, but experts say the necessity of addressing budget and tax issues will trump all other considerations next year. “Clearly a second term for the Obama administration would be business as usual as best they can,” explained Timothy McTaggart, partner at the Pepper Hamilton law firm during a pre-election webinar. “I don’t think Dodd-Frank will remain sacrosanct for all time. I think during a second term the [regulatory] agencies will get past the point of having to put the rules out, they will get some feedback and they will start making it known where they see gaps or deficiencies.” Karen Shaw Petrou, managing partner of Federal Financial Analytics, said...

No matter who sits in the Oval Office or which party controls Congress following next week’s election, expect GSE reform to remain a secondary priority in 2013, despite the best efforts of select lawmakers who want to get the legislative ball rolling, experts say. A functioning non-agency mortgage-backed securities market is necessary before members of Congress can be convinced to move forward with GSE reform, according to Rep. David Schweikert, R-AZ. Schweikert told attendees of the ABS East conference in Miami last week that’s why he plans to introduce legislation during the 113th Congress to establish a non-agency MBS framework.

Legislation that would delay foreclosures on mortgages of certain military servicemembers, retirees and surviving spouses of soldiers and sailors who died on active duty would cost taxpayers more to enact and implement rather than as a revenue raiser, according to Congressional Budget Office. The CBO estimates that enacting S. 3322, the Servicemembers’ Protection Act of 2012, would increase direct spending by $16 million over the 2013-2022 period. Implementing it would hike discretionary costs by ...

Rep. David Schweikert, R-AZ, said this week that in the coming months he will introduce bipartisan legislation to establish a regulatory framework for prime non-agency MBS. “I’ve spent the last two years trying to figure out what the box will look like,” he said. Non-agency MBS participants continue to debate whether reform of the government-sponsored enterprises is necessary before the non-agency MBS market can return in a meaningful manner. At the ABS East conference sponsored by Information Management Network this week in Miami, Schweikert said a functioning non-agency MBS market is necessary before members of Congress can be convinced to move forward with GSE reform. “I need to have...

Congress will act on a bipartisan basis after the November elections to approve legislative changes to the Home Affordable Refinance Program, a well-connected industry participant predicted, although some Republicans in Congress remain opposed to a bill crafted by Senate Democrats Robert Menendez, NJ, and Barbara Boxer, CA. Lewis Ranieri, chairman and founding partner of Ranieri Partners, said this week that he fully expects Congress to approve S. 3522, the “Responsible Homeowner Refinancing Act,” after the upcoming elections. He suggested that Republicans have been unwilling to pass the bill due to fears that approving an Obama administration proposal could hurt their re-election efforts. Ranieri made...

Both supporters and opponents of the mortgage interest deduction are laying the groundwork in anticipation of a renewed post-election effort to significantly revise or even outright repeal a staple of middle-class homeownership as Washington is forced to grapple with tax reform and the looming “fiscal cliff.” A number of industry trade groups were reluctant to go on record but industry insiders say they are getting their facts and research together in anticipation of the first serious attempt to repeal the MID in two decades. The most critical factors that will dictate...

The Federal Housing Finance Agency says its proposed new securitization platform could be used now by Fannie Mae and Freddie Mac, as well as by private issuers, but it’s also intended to serve a post government-sponsored enterprise marketplace. Last week, the FHFA issued a call for public comment on a white paper outlining its proposed common securitization platform and a model pooling and servicing agreement. Those plans are also included in the agency’s updated strategic plan issued this week. The 31-page strategic plan – which updates a draft issued by the FHFA in February – sets...