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Maine Modular Home Builders Association supports NAHB efforts on Mortgage Reform

May 28, 2010
Posted In: General

Augusta, Maine - The Modular Home Builders Association of Maine supports the National Association of Homebuilders’ work in rebuffing the proposed amendments to the Restoring American Financial Stability Act, which they say would slow down the flow of mortgage credit for the United States’ housing finance system.

“While the MHBA supports the efforts of Congress to restrict or prohibit financial practices that could once again jeopardize the entire U.S. economy, we need to be careful that our regulations do not tilt the scales too far towards over-regulation,” explains Nick Sherman, Vice President of the MHBA. “The efforts by the National Association of Home Builders (NAHB) to defeat two amendments, which were to be included as part of the major financial overhaul bill currently making its way through the Senate, is a prime example of how NAHB membership (which comes as part of every MHBA membership) directly impacts the interests of home builders in Maine and across the nation.”

After hearing testimony from the NAHB and others, the Senate voted to reject the two amendments, one offered by Sen. John McCain (R-Ariz.) and the other by Sen. Bob Corker (R-Ten.). McCain’s amendment proposed ending government control in the next two years of Fannie Mae and Freddie Mac and expecting each to shrink their mortgage portfolios. Corker’s amendment would have required a five percent down payment on all mortgages, even ones insured by the Federal Housing Administration.

“The on-going fragility of the financial markets, threatened by rising national debt among some E.U. countries, the rollercoaster stock market performances around the world, and volatile oil prices, are clear indications of why we need the U.S. government to continue support of the mortgage markets through Fannie Mae and Freddie Mac,” Sherman continued. “While a housing recovery appears to be on the near-term horizon, now is not the time to drastically regulate how Fannie & Freddie underwrite loans or remove their support of the home mortgage industry altogether. The NAHB is to be commended for leading the fight in defeating these amendments.”

According to the NAHB, provisions concerning portfolio limitations, loan limit repeals and increasing mandatory down payments in the McCain amendment would hinder Fannie Mae and Freddie Mac from participating in the secondary housing market. They also mentioned that the amendment could put an end to the housing finance delivery system as we know it, but not offer an appropriate substitute.

By explaining in a letter how the Corker amendment could damage the housing market and decrease the availability of affordable mortgage options, NAHB made it clear this proposal would not benefit homeowners. They stated that increasing the GHA’s down payment requirements from three and-a-half percent would deny credit to potential borrowers, and that expecting a five percent statute for every other mortgage would impose excessive constraints on the regulation and exercise of mortgage underwriting practices.

The Modular Home Builders Association of Maine is proactive with issues affecting members, consumers, and public policy. The Association establishes and promotes practices and standards for excellence in homebuilding. For more information about the Modular Home Builders of Maine, or how to get started on plans for your new home, visit www.modularhomebuilders.org.