Calabria Hearing, GSE Reform, M&As and the IMB

Some of the topics we’re looking at this week …

It certainly seems like the season for housing finance is in full swing. Here are a few of the things we are watching.

Mark Calabria is set to testify in front of the senate next week in a hearing set tentatively for February 14th. The big question for us is will the Senate Banking Committee show the love to Mark, a former brethren of the committee, on this Valentine’s Day or will some of the more progressive Democrats use this hearing to target concerns about comments made over the previous years from Mark relative to everything from questioning the need for a government guaranty to cross subsidies for affordable housing. Add to the list recent statements made by both Acting Director Otting and Treasury Secretary Mnuchin about the administrative options to act on the GSEs. We think this is lining up to be an interesting hearing.

Speaking of the GSEs, its been a week of “what did he mean by that remark?” It began with comments by the FHFA Acting Director, followed by a release of an outline for potential GSE reform from Senate Banking Committee Chairman Crapo. Then came an endorsement statement from Secretary Mnuchin about the legislative effort, followed by his live TV comments about the Administration moving forward if Congress does not. In the meantime, consumer groups have come out with negative statements about the legislation. There are rumors of plans being drafted inside the Treasury Department. All this leads us to be interested in seeing how this plays out in the weeks ahead.

The realities of the tighter market showed its face this week as Provident Savings Bank, a roughly $1 billion mortgage originator, chose to shutter its mortgage division. Mortgage Media is closely watching moves like this, especially after the Mortgage Bankers Association’s Independent Mortgage Bankers Conference last week in San Francisco. The MBA began its event with a widely-attended M&A session. As one attendee speculated to MM, “It seems like everyone is either for sale or buying.” We will be watching closely as the winter season continues to see what activity occurs in this space.

Speaking of the IMB conference, MM’s own SA Ibrahim was on site, conducting a series of onsite video interviews with key leaders in the mortgage banking industry. Take a look on the Mortgage Media site for the Bob Broeksmit interview – more will be shared soon.

Finally, the State of the Union is now behind us, and it was clear that the risks of another government shutdown loom large. With just days to go for a budget to be passed in congress and signed into law by the President, MM is watching closely to see if there is a closure, and what the ramifications might be this time. Stay tuned.