Today, it is mr. Birthday. [applause] rep. Waters if anyone wishes to sing happy birthday, please save it for later. [laughter] we thank you for that, madam chair. Rep. Waters i recognize myself for four minutes to give an opening statement. Good morning. Discuss theto impact of the trump and ministrations housing reform plan. We are joined by stephen mnuchin, hud director, ben carson, and mark calabro. Welcome. Administrations housing reform plan would be disastrous for our housing system. The Trump Administration is threatening to end the conservatorship of the government sponsored enterprise. Without congressional action to provide explicit government guarantee, it is implemented in this way, it is likely it would create turmoil in the Housing Market, prevent Many Americans from obtaining 30 year fixed Rate Mortgages unblock families across the country from attaining the American Dream of homeownership. For this reckless plan administrative action on the table, the Trump Administration also recommends that Congress Make several harmful legislative reforms. For example, the trump plan would abolish the affordable sing goals, which of support Affordable Housing and replace them with a mortgage fee that Trump Officials have not bothered to spell out the details for. The plan would fundamentally undermine the federal housing and ministrations ability to create affordable homeownership opportunities. The Trump Administration has proven again and again that it is not to be trusted. It has consistently pushed for harmful housing policies and eliminating key housing funding for those most in need. This administration has proposed tripling risks to lower income slashing and sh huds budget by 18 . Dreamers also blocked from loans and proposed to make it nearly impossible for victims of housing discrimination to obtain justice. This is an administration that reportedly wants to raise homeless camps and round up persons experiencing homelessness and force them to live in decrepit federal buildings. By contrast, democrats on this committee have put forth measures to improve the affordability and availability of housing. For example, we have bills to end the homelessness crisis, mortgages more affordable and protect dreamers, lgbtq individuals, and families and children with mixed immigration statuses and foster youth. When it comes to the Housing Finance system, i have long maintained any housing reform proposal should adhere to certain key principles. These principles include maintaining access to the 30 year fixedRate Mortgage, ensuring sufficient capital is in place to protect house payers, providing stability and can withstande future financial crisis and , transparencyion and standardization in a way that ensures a level Playing Field for all financial institutions, especially Credit Unions and community banks. Maintaining access for all qualified borrowers, they can sustain ownership and serving homeowners of the future and ensuring access to affordable rental housing. It is clear the trump and ministration proposal does not live up to these principles. Today this committee will examine why the officials who are eyewitnesses today, are supporting such a harmful plan. I recognize the Ranking Member of the committee, the gentleman from North Carolina, mr. Mchenry, for four minutes. You, misses thank chair. Is a powerful opportunity for bipartisan cooperation. We have a willing administration who is engaged in a productive dialogue on Housing Finance reform for the longterm. Ideald government is not for many things, but it is an ideal moment for difficult policies that divide both parties. Dividesfinance reform both parties. There is not a partisan only coalition that can produce fundamental Housing Finance reform. Democrats have tried it and failed. Likewise have tried it and failed. In order to have lasting change ,o our Housing Finance system it is important we legislate in a bipartisan way, and this is an ideal moment to do it. I am encouraged that secretary mnuchin and secretary carson a longtermd solution. It is a positive step toward building a Housing Finance system that makes the goal of affordable homeownership more achievable. While by no means perfect, it awayhes a path forward and from the status quo that puts taxpayers at risk and creates competition within the market. Inaction puts taxpayers at risk. Legislative in action regulatory inaction, puts taxpayers at risk. Out toary i reached chairman waters for ideas on Committee Hearings i thought could be bipartisan. This was one of them. I offered that back in january and 11 months later we are here today. The federal government, placed conservatorship and nationalized after their collapse, fannie mae and freddie mac. We do not want to relive that. This administration cannot do it alone, put us on a satisfactory path. Macy fannie mae and freddie remain in conservatorship, without competition. Our current economy is strong. This is the time to do Housing Finance reform because Economic Conditions are doing well. With a downturn at some point in time and without congressional action, our bailout of these institutions is more likely than not. Calabro took over calabria took over. It is too important to give that type of risk. We have been trending upward the last eight years. We may be reaching the top of the housing cycle. Inhave serious Systemic Risk the federal Housing Administration. It is important we legislate for the long term. We know it is not easy, but it is necessary. We cannot kick the can down the road. I want to highlight proposals we are focused on. One, a new Housing Finance system must present clear boundaries between the respective roles of thegses and fha. Congress needs to encourage competition by leveling the Playing Field and creating an open chartering process to provide a path for other companies to obtain these benefits. I think we can Work Together and achieve a bipartisan outcome that creates that competition, that certainty in the marketplace. I think this can make the American People proud and put us on firm Economic Standing for a generation to come. With that, i yield back. Rep. Waters thank you. I now recognize the gentleman scott, for oner. Minute. Mr. Scott think you, misses chair lady. This marks the 10th anniversary andhe passing of dodd frank the tremendous financial crisis we went to. But there is no more burning the great failure lookis point than as we across the country and every state and every community and it is filled with homelessness. So we have got to take a very serious look at this. We are hopeful in this Community Committee we would do so. On protectingus that 30 year mortgage. We have to ensure sufficient private capital is in place to protect our taxpayers. There is so much for us to get to. The American People are depending on us and i sincerely hope you three gentlemen will open our eyes to much of what we are now only dimly aware. Thank you. The waters i now recognize gentleman from ohio, mr. Stivers. You. Tivers thank it fannie mae and freddie mac have already been in conservatorship. A long overdue process we need to deal with. And senaten house proposals, democrat and republican proposals. Witnesses have made it clear they prefer comprehensive reform from congress. If not, they intend to proceed with administrative reforms. Work wee can restart should have completed long ago. Bipartisan, comprehensive reform so americans can achieve the dream of homeownership and avoid further bailouts. Ande the skeptics wrong achieving those goals, i yield back to balance my time. I want to welcome todays distinguished panel. We will hear from the honorable stephent. Mnuchin, secretary of the treasury. Secretary mnuchin testified previously before the committee and needs no introduction. Welcome. We will then hear from honorable carson, secretary of housing and development. He has also testified previously and needs no introduction. Welcome. Finally, we will hear from the honorable dr. Mark a. Calabria. This is alert director calabrias first appearance before the committee. He has served as the director of the fha since april of this year. In recent years he served on the republican staff of banking, housing and urban development, worked at an institute and most recently, as chief economist to Vice President michael pence. Welcome, director calabro. For purposes of testimony, each of you will have five minutes to summarize your testimony. Secretary mnuchin, you are recognized for five minutes to present your oral testimony. Sec. Mnuchin thank you. Chairwoman waters, Ranking Members and members of the committee, i am pleased to be with you today to discuss the department of treasurys housing reform plan. Last month my colleagues and i testified rep. Waters mr. Secretary, would you move your microphone closer and speak directly into it, please . Sec. Mnuchin last month my colleagues and i testified before 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. I am hopeful with good faith discussions, congress and the ministration will act in a comprehensive matter to support Affordable Housing, tailored to the federal governments influence over the housing 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 if the endnistrations plan, an to Affordable Housing. Oppose reducing or eliminating governmentsponsored enterprises longstanding support for Affordable Housing. Grateful to clarify treasury recommendations 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. Treasuries plan advances for continued backing for and widespread availability of the 30 year fixed Rate Mortgage loan and the gses and their successors to help fund housing for low, moderate income, and other renters. Have ation, the gses least four statutory mandates to promote affordable mortgage credit for historically underserved borrowers and renters. One, a duty to serve focusing on three markets. Housingured housing, preservation and role markets. Two, making certain contributions to the Housing Trust fund and capital magnet fund. Three, Charter Authority for access to mortgage credit throughout the u. S. , including central cities, rural areas and underserved areas. Purchaseequirement of specified amounts of certain multifamily Mortgage Loans that support housing for specified underserved borrowers and renters. Includees plan does not specific recommendations to alter the duty to serve a specified underserved market or the Affordable Housing contribution. The treasury seeks to preserve the National Service requirement with added protections. With respect 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 they coordinate withfha and fannie mae with fha and fannie mae. To assure an efficient and foropriate federal role housing. Treasury is not recommending a reduction in support for underserved borrowers. Treasury is recommending a more effective means of delivering 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 challenges of underserved borrowers and renters. Preferencetrations is to work with congress to enact comprehensive Housing Finance regulation. Legislation could achieve lasting structural reform, competitive advantages over private sector. At the same time, we believe reform should proceed precede legislation. I am proud of the work we have done to create conditions for greater Economic Growth, better opportunities for families, and i hope both committees work with us on passing legislation. Thank you. I am pleased to answer any questions. Rep. Waters thank you, secretary carson. Dr. Carson thank you for the opportunity to appear before you discuss how we are supporting this administrations efforts to reform the nations Housing Finance system. Mnuchin, i secretary was taken aback by the title of this hearing. If we 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 Affordable Housing crisis. Lawsicting load zoning have made housing prohibitively expensive, driving up rents and house prices to the highest in the country, and leading to california responsible for nearly half of our nations unsheltered Homeless Population. Latest data found californias Homeless Population increased 16 over the past year alone. Was it not for californias increase, homelessness would have declined nationally. Contrary to what is happening in proposala, huds addresses how to best serve Affordable Housing needs while staying within the principles outlined by leaders of both parties, including chairwoman waters. We look forward to working with congress to move this legislation forward. I am confident we are starting from a place of significant common ground, what a future housing system should look like. At hud, we support millions of families with Affordable Housing providing Credit Access and liquidity in the Mortgage Market. We allow the private market to work, but in those areas where it cant or wont, lets continue to target fha programs to borrowers not served by traditional underwriting. Our plan preserves and strengthens pivotal roles while continuing delivery of that support and protecting taxpayers. Historically serving unmet Housing Needs has been fsas most important contribution to the American Housing market, facilitating entry into responsible house ownership. Without it, millions of families with lack access to affordable mortgage credit. Take for instance a typical fha borrower. Last year they were 39 years old, had a credit score of 666 of 666, purchased a home for 220,000. Low or moderate income individuals. 34 were minorities. In addition to helping borrowers by their first home, we want to help them stay in their homes. To improvells on fha servicing by creating more flexible loss mitigation processes. We are working to get a more diverse base of lenders into the program. Today it represents just 15 . They will return to offering fha fhas ere revising annualcerses and clarifying when h. U. D. And the aftere department will go allegations of fraudulent lending. Another critical piece of our need to modernize technology. Operatedes, h. U. D. Has on antiquated, Obsolete Technology that inhibits its appropriately manage risk. A y are undertaking multiyear modernization effort to bring its i. T. Infrastructure 21st century. This is their opportunity to move generations ahead to a stateoftheart system that fully digitize the entire mortgage process and align it industry standards. Our plan also calls on congress cap iminate the statutory on the rental Assistance Program which allows Public Housing leverage nd owners to private capital to preserve properties for long term affordability. Its launch in 2012, red has proven to be an story. Rdinary success a report were releasing this long onfirms what weve suspected. Red is stimulating billions of dollars in capital improvements, improving Living Conditions for lower income residents and enhancing the Financial Health these critical Affordable Housing resources for future generations. Madam chair, woman, Housing Finance reform is the final Unfinished Business remaining from the financial crisis. It one of the committees to you have anties and administration committed and prepared to work with co