Reform of the nation's housing system is picking up steam, with one regulatory agency set to vote on risk retention exemptions on Tuesday, multiple hearings about the future face of housing underway on Capitol Hill, and the administration on record with its broad outline for change.  But, with everything else going on at home and abroad there has been very little media attention to the topic and reform could very well come to public attention as an accomplished fact.

There are however stakeholders who are getting nervous that this forward progress is taking place in a vacuum and that ideologies (take your pick) will ultimately triumph over the industry's interests.  For the second time in a week we have seen statements issued from trade associations strongly hinting that they believe they should be sitting at the table.  Last week it was Securities Industry and Financial Markets Association and The Community Banking Mortgage Project.  Today sixteen associations, including the two just mentioned, have come together to draft "Principles for Restoring Stability to the Nations Housing Finance System," and, yes, suggesting they should be included in determining the outcome.

The Mortgage Bankers Association  (MBA) today released a document  intended to help policymakers reform and repair the nation's housing finance system.  "Central to the principles," the release said, "are the concepts that housing, through homeownership or rental, should be a national policy priority, private capital must be the dominant source of mortgage credit but that a predictable government role is necessary, and changes to the mortgage finance system must be done carefully."

The four principals set forth in the document are:

• A stable housing sector is essential for a robust economic recovery and long-term prosperity. Housing whether through homeownership or rental, promotes social and economic benefits that warrant it being a national policy priority.
• Private capital must be the dominant source of mortgage credit, and it must also bear the primary risk in any future housing finance system.
• Some continuing and predictable government role is necessary to promote investor confidence and ensure liquidity and stability for homeownership and rental housing.
• Changes to the mortgage finance system must be done carefully and over a reasonable transition period to ensure that a reliable mortgage finance system is in place to function effectively in the years ahead.
• The statement says that the current government-dominated mortgage system is not sustainable but investors need to understand what they are risking when they commit to a system of private investor capital. There must be a workable balance between sound underwriting principles, consumer protection, and the need for responsible innovation and risk-taking.

While in favor of a private capital market, the signors do not want the government to be absent from a new system.  "Government support through various insurance and guarantee mechanisms is especially important to facilitate long-term fixed-rate mortgages, affordable financing for low and moderate-income borrowers, and financing rental housing in all parts of the country including rural areas." The ultimate goal, the statement says, is for the public and private sectors to work together to ensure a largely private secondary market that ensures the availability of safe, stable, and affordable financing.

The coalition represented by these principles is a familiar one, sort of.  There have been a number of similar letters and statements issued over the last several years by a group with MBA, the American Bankers Association, American Financial Services Association, and Housing Policy Council and several other trade associations at its core.  Other groups, some with a state or regional focus have periodically joined in on topics of special interest to their constituencies.  In addition to the associations named above, the Principles were submitted by:

CRE Finance Council

Independent Community Bankers of America

Manufactured Housing Institute

Mortgage Insurance Companies of America

National Council of State Housing Agencies

National Apartment Association

National Association of Home Builders

National Association of Realtors®

National Multi Housing Council

Real Estate Roundtable