Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, gave the following statement at a full Committee hearing entitled, “Prioritizing Fannie’s and Freddie’s Capital over America’s Homeowners and Renters? A Review of the Federal Housing Finance Agency’s Response to the COVID-19 Pandemic.”
Today, this Committee convenes for a hearing to conduct oversight over the Federal Housing Finance Agency (FHFA). Our sole witness today is Dr. Mark Calabria, the Director of FHFA.
We had initially intended for Dr. Ben Carson, Secretary of the Department of Housing and Urban Development, to also join us for today’s hearing, but we were told his calendar is booked. Secretary Carson does appear to have enough time on his calendar to make non-pandemic related decisions that undermine fair housing protections and to attend non-pandemic related events, but apparently not enough time to talk to this Committee about how he is responding to the current national emergency. Failed leadership has come to define this Administration’s response to the pandemic, which continues to have a terrible impact across the nation. Nearly 200,000 people in the United States have lost their lives to the virus.
Short of a vaccine, our homes and the ability to shelter in place are the greatest protection we currently have against COVID-19. The U.S. Census Pulse Survey recently found that 8.4 million homeowners and 8.2 million renters are behind on their rent and mortgage payments. Of those households, 33.4 percent report that they are either somewhat or very likely to face eviction or foreclosure in the next two months. Meanwhile, over half a million people in the United States were experiencing homelessness going into the current crisis, historically redlined communities are reporting higher rates of COVID-19, 69 percent of Latinx borrowers are unaware of mortgage relief options, and Black borrowers are citing higher mortgage rates and an inability to refinance their mortgages as a result of lending discrimination. Unfortunately, this Administration’s ideological agenda continually gets in the way of meeting the current demands of the housing market and the people our government stands to protect.
Instead of focusing on how to help homeowners and renters and how to support the housing market during this national emergency, Director Calabria’s actions suggest that he is first and foremost interested in filling the coffers of Fannie Mae and Freddie Mac so that he can continue to move forward with his plans to release them from conservatorship. Rather than allowing homeowners to take advantage of historically low mortgage rates, Director Calabria announced a new refinance fee that would take some of the savings that would have otherwise gone into the pockets of families and instead redirect that money into the pockets of Fannie and Freddie.
Director Calabria is also rushing forward with a new, complex regulatory capital framework for Fannie Mae and Freddie Mac, ignoring calls from me and many others to delay this rulemaking in light of the pandemic. Not only is the timing of this major change inappropriate because it would cause serious market disruption in the middle of a recession, but many have raised concerns that these changes would actually make the housing market less prepared for the next economic crisis. Many have also raised concerns that the rule Director Calabria has put forth would hamper the ability of the GSEs to carry out their mission of promoting access to credit to underserved borrowers.
In the four months that Senate Republicans have failed to pass $100 billion in critical rent relief and the $75 billion Homeowner Assistance Fund included in the Heroes Act, eviction filings continue to grow, mortgage delinquencies have reached their highest level since August 2014 despite forbearance measures in place, and 3.6 million mortgages are now in forbearance. Meanwhile, mortgage credit supply has fallen to its lowest level since March 2014. I am very concerned that FHFA’s response to this pandemic has fallen short and that Director Calabria like Trump is putting his personal political agenda ahead of the American public.