letter

July 17, 2007

The Honorable Barney Frank
Chairman, Committee on Financial Services
United States House of Representatives
Washington, DC 20515

Dear Chairman Frank: on behalf of the Mortgage Bankers Association, I am pleased to inform you of our support for H.R. 2895, the National Affordable Housing Trust Fund Act of 2007. This bipartisan legislation would create an affordable housing production program that would produce, rehabilitate and preserve housing for low- and moderate-income families across the country.

H.R. 2895 would address some of the critical housing needs of our country by focusing on the housing needs of people who are extremely low-income, while providing flexibility to assist others in need. Quality affordable housing is simply not available for many families in this country. This legislation addresses that need by building on existing federal programs which are currently being used by mortgage lenders to develop and preserve affordable housing. By providing additional funds, more housing can be made affordable to lower-income families.

Using funds generated through program changes contained in other legislation, this legislation could put as much as a billion dollars per year into affordable housing. Importantly, the trust fund is not funded through increased fees on FHA programs but rather utilizes funds generated through increased FHA business volumes – funds that would otherwise likely go back into the Treasury or to fund non-housing related activities.

As you know, we continue to be concerned that in the long-term, pressure could build to increase various FHA fees in order to create more resources for the fund. We support your position that this should never occur and appreciate that you have included a provision in H.R. 1852 capping the mortgage insurance premiums at current levels unless the programs require higher fees to remain self-sustaining.

This legislation is entwined with legislation to reform the regulation of the housing government sponsored enterprises (GSEs) and the revitalization of the FHA. We continue to support the rapid enactment of GSE reform and FHA modernization legislation, both of which would significantly improve our housing finance system. We believe that these legislative efforts should continue to be a high priority for the Committee on Financial Services and Congress.

Thank you for your continued commitment to addressing our nation’s housing needs. We support your efforts and look forward to continuing to work with you on this and other issues.

Sincerely,

John M. Robbins, CMB
Chairman
Mortgage Bankers Association

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