Banking brief: Need for private capital uniformly endorsed at American Mortgage Conference

Few topics in finance garner as much attention – and varied opinion – as mortgage finance reform.

Observers on both sides of the aisle agree that steps are needed to delimit GSE involvement and attendant taxpayer exposure, but that consensus usually disappears when debate turns to specific measures for reform.

Last week we noted a crack in the ice at the American Mortgage Conference (AMC) in Raleigh, North Carolina. The conference is sponsored by the North Carolina Bankers Association. AMC draws policy makers and thought leaders from across the country to speak freely about the state of the single family mortgage market and offer their prescriptions for industry health.

Ideological differences remain regarding how the federal government should help ensure a vibrant mortgage market, but we also heard speakers uniformly endorse ways to bring more private capital into the market through measures such as enhanced use of first loss positions assumed by institutional investors.

We salute leaders who endorse responsible reforms designed to preserve mortgage access and market liquidity, using a greater proportion of capital from the private sector. Further, we are encouraged by the growing recognition that effective mortgage finance reform must also address the dramatic changes in cultural demographics, employment dynamics, and personal preferences of today’s home buyers.

Hopefully, lawmakers will take up reforms set forth in the inspired presentations and panel discussions witnessed at the 2015 American Mortgage Conference.