Credit unions’ storied history of providing housing financing to the underserved was highlighted during a Monday roundtable on Fannie Mae and Freddie Mac’s “duty to serve” (DTS).
Attended by CUNA and hosted by the Financial Services Roundtable, the discussion focused on a proposed rule from the Federal Housing Finance Agency’s (FHFA). It would require Fannie and Freddie (the Enterprises) to “improve the distribution and availability of mortgage financing in a safe and sound manner” for residential properties that serve very low-, low-, and moderate-income families in the three specified underserved markets. The plan also puts forward possible alternative approaches for evaluating DTS performance.
Participating with CUNA was Jerry Reed, president/CEO of Member First Mortgage, which is a credit union service organization based in Grand Rapids, Mich.
Reed along with other mortgage industry leaders recounted the role credit unions have long played in providing housing finance to underserved markets. “Credit unions have been serving these underserved areas for decades,” Reed told the group. “We’re very good at it.”
Credit unions should have equal access to partner with the FHFA and the government-sponsored enterprises (GSE) it oversees in crafting plans, pilots, technology and products that can provide solutions to further FHFA's efforts to meet the GSE's mandate to fulfill its DTS, he noted.
Small credit unions also should be considered for participation in pilot programs. “Small credit unions are more fluid and have the technology to participate,” Reed said.
Fannie and Freddie have a statutory duty to serve very low-, low- and moderate-income families. FHFA sought comments earlier this year on a proposal that would provide DTS credit for eligible Fannie and Freddie activities.
In its comment letter sent in March, CUNA stated that enabling and maximizing purchase and guaranteeing private market loans is the best approach for the FHFA’s oversight of the Enterprises.