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Congressional discussions on mortgage reforms came to a head when Sen. Bob Corker (R-Tenn.) offered an amendment mandating a 5% downpayment requirement for all mortgages, including those insured by the Federal Housing Administration (FHA). Running into strong opposition from NAHB, the Corker amendment failed by a vote of 57 to 42, with Democratic leaders supporting a new amendment effectively codifying a set of bank regulator mortgage guidance issued in 2006.
After being reconciled with the tougher provisions on underwriting standards passed by the House late last year, the final legislative Senate language settled on a new set of mortgage reform and anti-predatory lending provisions focused on mortgage originator underwriting reforms and compensation issues.
• Federal Home Loan Bank Credit Exposure Concentration Limit. NAHB and a coalition of other organizations acted to address a provision in the Senate’s financial overhaul legislation that would have severely hampered the provision by the Federal Home Loan Banks (FHLBs) of much-needed liquidity to the financial system. The measure would have prohibited institutions important to the system from lending any unaffiliated company an amount exceeding 25% of the capital stock and surplus of the lending institution. NAHB advised key House and Senate leaders that this would force the FHLBs to reduce their advance positions to comply with the cap. As a result, in the final legislative package the FHLBs were excluded from the concentration limit requirement.
• Future Role of GSEs. After much partisan debate on the future of housing government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, the final legislation does not include substantive reform of the two housing financial institutions. In mid-May, a group of Republicans led by Sen. John McCain (R-Ariz.) introduced an amendment to end government control of Fannie Mae and Freddie Mac within two years and then force the two GSEs to reduce the size of their mortgage portfolios. Opposed strongly by NAHB, the amendment failed by a vote of 56 to 43. The final legislation requires the Treasury Department to study the feasibility and desirability of ending the conservatorship of Fannie Mae and Freddie Mac.
• Elimination of Thrift Charter and Office of Thrift Supervision. NAHB policy supports a specific charter for institutions specializing in housing finance (thrift charter) and a housing finance focus in any future bank regulatory structure. After reiterating this position to Congress, a proposal by the Administration to eliminate the thrift charter was removed in the final House-Senate conference report. Additionally, the conference report abolishes the Office of Thrift Supervision, transferring its authority mainly to the Office of the Comptroller of the Currency.
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• Consumer Financial Protection Bureau. Throughout debate in the House and Senate, NAHB warned Congress that the creation of a new Consumer Financial Protection Bureau, or CFPB, could further destabilize an already fragile housing finance system. Arguing that consumer protection and safety and soundness should be regulated by the same entity in order to provide proper balance, NAHB and a large number of business and industry groups won some important distinctions in the final conference report establishing the new CFPB.
The legislation calls for the CFPB to be an independent entity housed within the Federal Reserve. However, language was added to establish a bank regulator review system and authority for prudential regulators to conduct exams for banks under $10 billion.
• Bank Lending Limits. Along with its industry colleagues, NAHB expressed serious concern over a legislative provision that would have subjected state-chartered banks to national lending limits on loans to any one borrower as a percentage of their capital. This provision would have taken away from state regulators — who are better able to judge the unique circumstances of their state economies — the discretion they have exercised for decades on lending limits for state- chartered institutions. The final legislation that emerged from the House-Senate conference removed the language imposing national bank lending limits on state-chartered banks.
Annual Review Cycle Public Input Request
The Standards Review Committee (SRC), Department of Public Works and Engineering (PWE), has been established to review, revise, and update PWE’s Standards and Documents. Public input and participation is requested by the submittal of proposals for suggested changes, comments, recommendations and other information.
The year 2010-2011 annual review cycle involves review of General, Survey, Graphic, Platting and Easement requirements, associated design criteria, specifications and standard details (Infrastructure Design Manual Chapters 1, 2, 3, 4 and 5). We are seeking input from all parties with expertise and interest in the subject matter. Please visit the following link to get further details on the process of providing input: http://documents.publicworks.
houstontx.gov/document-center/standards-review-committee/ index.htm.
We are requesting all the interested parties to provide comments for changes by no later than September 15, 2010. The forms to submit comments can be found at: http://documents.
publicworks.houstontx.gov/document-center/request-for- proposed-revision-to-coh-standards/
index.htm
Info: Rajiv Arya, (713)837-0121 or
rajiv.arya@
houstontx.gov AUGUST 2010 | HOUSTON BUILDER | GREATER HOUSTON BUILDERS ASSOCIATION – BUILDING A BETTER FUTURE
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