The Federal Housing Finance Agency gave an update on the state of the lending market at the Mortgage Bankers Association’s Secondary conference in New York City, including its view that the credit box still holds room for expansion and its view on GSE reform.

On Monday morning, Quicken Loans Vice Chairman Bill Emerson questioned Robert Ryan, FHFA acting deputy director of division of conservatorship, in the frigid ballroom of the Marriott Marquis in Times Square.

Ryan answered questions regarding the credit box, saying the industry needs to see an opening of the credit box in a safe manner.

“We do see an expansion of credit,” he said, noting the expansion of Fannie Mae and Freddie Mac 97% loan-to-value programs.

He added that lenders will also need to be willing to take risks when it comes to lending.

“I don’t think it’s realistic to assume you’ll be able to transfer 100% of the credit risk consistently,” Ryan said.

However, he said mortgage credit risk at this point is not a concern, and that the credit quality for loans written remains strong.

When it comes to GSE reform, Ryan estimated it would take between three and five years to transition, but said he hopes to see a blueprint for reform in the works soon.

“The actual blueprint of what reform should be couldn’t happen fast enough,” he said.

If the reform is more drastic, however, then the transition period could in fact take longer than five years.

In an interview with HousingWire, Ellie Mae CEO Jonathan Corr conceded the MBA’s suggestion that GSE reform could be third on the administration’s list of priorities, after tax and regulatory reform, seems logical.

“Enough parties said they want to see something happen,” Corr said. “How they do it is another question.”

In the first session of the day, MBA CEO David Stevens explained GSE reform is high on the administration’s list of priorities.

Corr explained the time for GSE reform is not when something goes wrong, and decisions will need to be made quickly, but now, when the mortgage industry is strong. He said the MBA’s recent white paper is a healthy starting place for a debate on GSE reform.

Click here to read about the MBA's optimism on why GSE reform will work this time around, or here to see a contrary view.