Lawmakers also heard testimony from the head of the housing agency, this hearing is just under three and a half hours. Will come to order. Without objection the chair is authorized to declare a recess of the committee at any time. This hearing is entitled, the end of Affordable Housing . A review of the Trump Administrations plans to change Housing Finance in america. Before i recognize myself, members, today is mr. Mchenrys birthday. [ applause ] if anyone wishes to sing happy birthday, please save it until later. Thank you. We all thank you for that, madame chair. Happy birthday. Thank you. I now recognize myself for four minutes to give an Opening Statement. Good morning, today were here to discuss the impact of the Trump Administrations Housing Finance reform plans. We are joined by treasury secretary steven ma shun, ben carson, and mark calabrio welcome. Let me say up front the Trump Administrations housing reform plan would be a disaster for our housing systems. The Trump Administration is threatening to end a conservativeship of the spons sponsored gses with our action to provide a government guarantee. If implemented it is likely it would create tour moil in the Housing Market prevent Many Americans from obtaining 30 year fixed Rate Mortgages and block families across the country from obtaining the American Dream of Home Ownership. With this reckless plan on the table, the Trump Administration also recommends that Congress Make several harmful legislative reforms, for example, the trump plan would abolish the Affordable Housing affordable h ownership and rental housing and replace them with the mortgage fee that Trump Officials have not bothered to spell out details for. The plan would also fundamentally undermine the federal Housing Administration ability to create affordable Home Ownership opportunities. The Trump Administration has proven again and again that it is not to be trusted. It has consistently push for harmful housing policies and for slashing and eliminating key housing funding for those most in need. This is an administration that has proposed tripling rents on our lowest income you households and slashing huds budget by 18 . Eliminating protections for lgbtq individuals, blocked dreamers from fha loans and proposed to make it nearly impossible for victims of housing discrimination to obtain justice. In is an administration that reportedly wants to raise homeless camps and round up persons experiencing homelessly and force them to live in dekrep it federal builds. By contrast democrats on this committee put forth measuring to improve afford ability and availability of housing. For example bills to end the homelessness crisis, make fh. A mortgage affordable and protect dreamers. Lgbtq individuals abfamilies and children with mixed immigration statuses and foster youth. When it comes to the Housing Finance system i have long maintained that any Housing Finance reform proposal should adhere to certain key principles, including maintaining access to the 30year fixed Rate Mortgage. Ensure sufficient private capital to in place to protect taxpayers. Providing lid which hadty and stability to withstand financial crisis. Ensuring a shooting transmission to new finance system requiring transparency and standardization implementing level Playing Fields for all individuals especially credit union and Community Banks, maintaining access for all qualified borrowers sustaining Home Ownership and ensuring access to affordable rental housing. Its clear that the Trump Administration proposal does not live up to the principles. Today this committee will committee why the officials who are our Witnesses Today are supporting such a harmful plan. I now recognize the Ranking Member of the committee, the gentleman from North Carolina, mr. Mchenry for four minutes for an Opening Statement. Oh. Thank you, adam chair i want to thank the distinguished panel for being here today. Let me begin by saying this, this is a powerful opportunity for bipartisan cooperation. We have a willing administration who is engaged in a productive dialogue on hosing finance reform for the longterm divided government is not ideal for many things. But an ideal moment for difficult policy that divides both parties. Housing finance reform divides both parties. There is not a partisan only coalition that can produce fundamental Housing Finance reform. Democrats have tried it and failed. Republican republicans likewise tried and failed. In order to have it lasting change to our Housing Finance system, to put it on a sustainable path for the taxpayers, communities, it is important that we legislate in a bipartisan way. And this is an ideal moment to do it. Im encouraged that secretary mnuchin and secretary carson have proposed a longterm solution. Its a positive first step on a multiyear path toward building a Housing Finance system making the goal of affordable Home Ownership more achievable. And while by no means perfect, it stechs a path toward forward, and away from the status quo putting taxpayers at risk and prevents competition within the market. Inaction puts taxpayers at risk. Let me say that again. Inaction database legislative inaction, regulatory inaction puts taxpayers at risk. In january i reached out to chairwoman waters on ideas for Committee Hearings that could be bipartisan. This was one of them. I offered that back in january and 11 months later we are here today. But 11 years ago we in the federal government placing in conservativership and placed fanny mae and freddy mac with over 200 billion in taxpayer bailouts. We dont want to relive that. This administration cant do it alone and put us on the satisfactory path. Today they remain in conservership unreformed and without competition. Our current economy is strong. This is the time to do Housing Finance reform because the Economic Conditions is well. But within of an inevitable downturn at some point appear without congressional action and reform of the gscs is bailout of the institutions is more likely than not. In fact until connect collector clabia took over the gsh had a ratio of 1000 to one. Meej a small dip in market would guarantee failure. Housing finance is too important to put at that risk. Our Housing Market has been trending upward for the last eight years. We may be reaching the top of the housing cycle. We have serious Systemic Risk at the gscs in the federal Housing Administration. Its important we legislate for the long term. Its not easy but necessary. We cant kick the can down the road. I want to highlight a few portions of the administrations proposal that this committee needs to focus on. One a new Housing Finance system must first set clear boundaries between the respective roles of the gscs and fha. Second Congress Needs to encourage competition by leveling the Playing Field and 80ing an open chartering process to for other companies to attain bchts. I think we can Work Together appear achieve the bipartisan outcome that creates the competition that certainty in the marketplace. And i think this can make the American People plowed and put us on firm Economic Standing for a jermgs to come. With that i yield back. Thank you. I now recognize the gentleman from if a georgia, mr. Scott for one minute. Thank you very much, chair lady. Welcome. You know, chair lady, this marks the 10th anniversary of the passing of doddfrank and the tremendous finance crisis that we went to. But there is no more Burning Point to show the great failure at this point than as we look the country, and every sate, in every community, and it is filled with homelessness. So weve got to take a very serious look at this. And we are hopeful in this committee that we will do so. Weve got to focus on certainly protecting that 30year mortgage. Weve got to ensure the sufficient private capital is in place to protect our taxpayers. So there is so much for us to get to, the American People are depending on us. And i sincerely hope that you three gentlemen will open our eyes to much of what we are now only dimly aware. Thank you. I now recognize the gentleman from ohio mr. Mr. Stivers for one month. Thank you adam kmar as the members of are all aware. Fanny may anded freddy mack have been conservativership eight years. Im in congress night nine years already on the top roe this is a i dont think overslough due process. We have seen proposals come and go. House and the the representative proposal. Democratic and rns. Our members prefer conference reform imposed by congress. But if not they intend to proceed with administrative reforms. Its my hope to use the opportunity as a a opportunity to restart the work we should are completed long ago. A bipartisan comprehensive reforms ensuring americans can achieve the dream of Home Ownership and provide stability to the housing system and prevents future taxpayer funded bailouts. This should be the first of many hearings aimed at prochg skeptics wrong and achieving the goals. I yield back the balance of my time. I want to welcome todays distinguished panel. We will first hear from the honorable steven t. Mnuchin, secretary, u. S. Department of the treasury, secretary mnuchin has testified previously before the committee and needs no introduction. Welcome. We will then hear from the honorable dr. Benjamin s. Carson, secretary, u. S. Department of housing and urban development, secretary carson has also testified previously before the committee and needs no introduction. Welcome. Finally, we will hear from the horpable dr. Mark a. Calabria. Director federal finance housing agency. This is director calabria first appearance before the committee he has serve as director of the fha since april of this year. In recent years he served on the republican staff of the committee on banking, housing and urban development, worked at Cato Institute and most recently as chief economist to Vice President michael pence. Welcome, director calabria. For purposes of testimony, each much you will have five minutes to summarize your testimony. Second mnuchin, you are now recognized for five minutes to present your oral testimony. Thank you. Chairm chairmanwoman waters. Ranking member and members of the committee. I am pleased to discuss today the housingle reform plan. Last month i my colleagues and i testified before. Mr. Secretary will you move your microphone closer and speak directly flew it please. Last month is that better . Thank you. Last month my colleagues and i testified before this the Senate Banking committee after the release of the plan. The comments and legislative frameworks we have seen from members of both parties reflect bipartisan agreement on the need for legislative action and on the general principles of reform. Im hopeful with good faith Discussions Congress and the administration will act in a comprehensive manner to support Affordable Housing, appropriately tailor the federal government influence over the Housing Finance sector, protect taxpayers from future bailouts, and foster competition that will benefit consumers. That is why i was surprised and disappointed by the title of this hearing which asks whether the administrations plan an end to Affordable Housing. To be clear treasury does not propose and indeed opposes reducing oh or eliminating the Government Sponsored Enterprises longstanding support for Affordable Housing. I am grateful for the tune to clarify treasurys recommendations here today and explain how our plan will preserve support for Affordable Housing while also improving the efficiency, transparency and accountability of the mechanism for delivering that support. Treasurys planned advances for continued government packing backing for and widespread available of the 30year fixed Rate Mortgage loan and the qgscs or successors should continue helping to fund multifamily housing for low and moderate income and other renters. In addition to the general support for Affordable Housing, the gscs have at least four key statutory mandatories to promote access to affordable mortgage credit for historically underserved borrowers and renters. One, a duty to serve focused on three specific underserved markets, manufactured housing, Affordable Housing preservation and rural markets. Two, a requirement to make certain periodic contributions to the housing truss fund and the capital magnet fund, three, Charter Authority to promote access to mortgage credit throughout the United States, including central cities, rural areas and underserved areas. And four, a requirement to purchase fhfa specified amounts of certain Single Family and multifamily Mortgage Loans that support housing for specified underserved borrowers and renters. Treasurys plan does not include specific recommendations to alter the duty to serve the specified underserved markets or the Affordable Housing contribution. Treasury seeks to preserve the National Service requirement but with some added protections. Wrkt to the fourth mandate, the Affordable Housing goals treasury recommends material changes that would establish a more efficient transparent and accountable mechanism for delivering tailored support to underserved borrowers. Further, the plan recommends that fhfa continue to coordinate with fha and enginemy mae who have primary responsibilities for housing lousing finance support to low and moderate income families that cant be philadelphia through traditional underwriting to assure efficient and appropriate federal role for housing. To be clear, treasury is not recommending a reduction for support for underserved borrowers. On the contrary, treasuredy is recommending a more effective means of delivering the support. I look forward to our conversation here today. One that i hope will continue after this hearing. We welcome your thoughts and suggestions to address the challenges facing underserved borrowers and renters nationwide. Finally i must emphasize that our recommendations make clear that the administrations preference is to work with congress to enact comprehensive Housing Finance legislation. Legislation could achieve lasting structural reform, competitive advantages over private sector, and at the same time we believe that reform can and should proceed administratively pending legislation. Unthe leadership of President Trump, i am proud of all the work we have done to create conditions for greater Economic Growth, more and better opportunities for working families and higher wages. I look forward to discussing with you critical Housing Finance reform. I hope the members of the committee from both parties will work with us on passing legislations. Thank you very much. I am pleased to answer any questions. Thank you. Secretary carson. Chairwoman wertz. Ranking member mchenry members of the committee thank you for the tune to appear before you today to discuss how the department of housing and urban development is supporting in administrations efforts to reform the nations Housing Finance system. First, like secretary mnuchin i was taken aback by the title of the hearing. Process if we really want to examine the end of Affordable Housing this would be a field hearing in San Francisco or los angeles. Two cities at the epicenter of the Nations Housing affordable crisis. Restrict