2010-9309. Public Input on Reform of the Housing Finance System

AGENCIES:

Office of the Undersecretary for Domestic Finance, Department of the Treasury; Office of the Assistant Secretary for Policy Development and Research, HUD.

ACTION:

Notice and Request for Information.

SUMMARY:

Consistent with the Obama Administration's commitment to openness and transparency and the President's Open Government Initiative, the Department of the Treasury (Treasury) and the Department of Housing and Urban Development (HUD) seek public input on establishing a more stable and sound housing finance system.

DATES:

Comment Due Date: July 21, 2010.

ADDRESSES:

Interested persons are invited to submit comments regarding this notice according to the instructions for “Electronic Submission of Comments” below. All submissions must refer to the document title and one of the above docket numbers. Treasury and HUD encourage the early submission of comments.

Electronic Submission of Comments. Interested persons must submit comments electronically through the Federal eRulemaking Portal at http://www.regulations.gov. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt, and enables Treasury or HUD to make them available to the public. Comments submitted electronically through the http://www.regulations.gov Web site can be viewed by other commenters and interested members of the public. Commenters should follow the instructions provided on that site to submit comments electronically.

Note:

To receive consideration as public comments, comments must be submitted through the method specified above. Again, all submissions must refer to the docket number and title of the notice.

No Facsimile Comments. Facsimile (FAX) comments are not acceptable.

Public Inspection of Public Comments. All properly submitted comments will be available for inspection and downloading at http://www.regulations.gov.

Additional Instructions. Please note the number of the question to which you are responding at the top of each response. Though the responses will be screened for obscenities and appropriateness, in general comments received, including attachments and other supporting materials, are part of the public record and are immediately available to the public. Do not enclose any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure.

FOR FURTHER INFORMATION CONTACT:

For general inquiries, submission process questions or any additional information, please call 202-622-7653. All responses to this Notice and Request for Information should be submitted via http://www.regulations.gov to ensure consideration.

SUPPLEMENTARY INFORMATION:

Treasury and HUD seek public comment on the following questions:

1. How should federal housing finance objectives be prioritized in the context of the broader objectives of housing policy? Commentary could address: Policy for sustainable homeownership; rental policy; balancing rental and ownership; how to account for regional differences; and affordability goals.

2. What role should the federal government play in supporting a stable, well-functioning housing finance system and what risks, if any, should the federal government bear in meeting its housing finance objectives? Commentary could address: Level of government involvement and type of support provided; role of government agencies; role of private vs. public capital; role of any explicit government guarantees; role of direct subsidies and other fiscal support and mechanisms to convey such support; monitoring and management of risks including how to balance the retention and distribution of risk; incentives to encourage appropriate alignment of risk bearing in the private sector; mechanisms for dealing with episodes of market stress; and how to promote market discipline.

3. Should the government approach differ across different segments of the market, and if so, how? Commentary could address: Differentiation of approach based on mortgage size or other characteristics; rationale for integration or separation of functions related to the single-family and multi-family market; whether there should be an emphasis on supporting the production of subsidized multifamily housing; differentiation in mechanism to convey subsidies, if any.

4. How should the current organization of the housing finance system be improved? Commentary could address: What aspects should be preserved, changed, eliminated or added; regulatory considerations; optimal general organizational design and market structure; capital market functions; sources of funding; mortgage origination, distribution and servicing; the role of the existing government-sponsored enterprises; and the challenges of transitioning from the current system to a desired future system.

5. How should the housing finance system support sound market practices? Commentary could address: Underwriting standards; how best to balance risk and access; and extent to which housing finance systems that reference certain standards and mortgage products contribute to this objective.

6. What is the best way for the housing finance system to help ensure consumers are protected from unfair, abusive or deceptive practices? Commentary could address: Level of consumer protections and limitation; supervising agencies; specific restrictions; and role of consumer education.

7. Do housing finance systems in other countries offer insights that can help inform U.S. reform choices?

Dated: April 16, 2010.

Alastair Fitzpayne,

Acting Executive Secretary, Department of the Treasury.

James Parrott,

Counselor to the Secretary, Department of Housing and Urban Development.