Democrats question FHFA nominee CalabriaÕ commitment to affordable housing

Testifies before Senate Banking Committee

Mark Calabria, the nominee for Federal Housing Finance Agency director, faced tough questions from Democrats during his appearance before the Senate Committee on Banking, Housing and Urban Affairs on Thursday.

Republicans on the committee were supportive of his nomination to lead the agency, citing Calabria’s extensive history in the housing industry.

Calabria currently serves as the chief economist for Vice President Mike Pence and has previously served as deputy assistant secretary for regulatory affairs at the U.S. Department of Housing and Urban Development during former President George W. Bush’s administration. Calabria also held positions at Harvard’s Joint Center for Housing Studies, the National Association of Home Builders and the National Association of Realtors.

He even served as a senior aide on the Senate Banking Committee where he was one of the lead drafters of the Housing and Economic Recovery Act of 2008, which created the FHFA.

Democrats, however, were not so supportive.

“Dr. Calabria has a long history in housing…so he’s well aware of the extensive influence he would have in this job,” said Sen. Sherrod Brown, D-Ohio, and ranking member of the committee.

Brown, along with other Democrats on the committee, criticized Calabria’s questioning of the need of a 30-year fixed-rate mortgage. They said the end of the 30-year mortgage would bring the most harm to black Americans.

Another member of the committee, Sen. Elizabeth Warren, D-Mass., and 2020 presidential contender, was also concerned about Calabria’s approach.

“For decades, America subsidized buying housing for white families…But discriminated against black families,” Warren said. She explained that even after discrimination was made illegal, it continued to happen, and questioned what Calabria planned to do to ensure that discrimination is dealt with.

But she didn’t give him much time to answer, other than to let him agree that discrimination is wrong.

Instead, she quickly moved on to affordable housing goals, saying Calabria had previously made statements against these goals.

“Congress requires the FHFA to set affordable housing goals, Warren said. “You made clear you want to gut these housing goals.”

She quoted Calabria’s previous stance, saying, “’It is beyond debate that affordable housing goals contributed to the housing crisis.’ end quote.”

When asked if he still thinks the affordable housing goals contributed to the housing crisis, Calabria answered that the goals had a marginal contribution to the crisis.

“If you are confirmed as director of the FHFA, will you commit to establishing firm affordable housing goals?” Warren asked.

“Within the confines of the establishment, yes,” Calabria replied.

But despite this battle with the Democrats, the housing industry is standing behind Calabria, urging the Senate Banking Committee to approve his nomination.

“The National Association of Realtors was pleased to see Mark Calabria today defend the FHFA’s critical role in the U.S. housing market,” NAR President John Smaby said. “Specifically, NAR applauds Dr. Calabria for pledging his commitment to the 30-year fixed rate mortgage, supporting additional access to capital, and highlighting taxpayer and consumer protection as critical tenants of housing finance reform.”

“With decades of housing policy experience, including time spent as an economist at NAR, Dr. Calabria has demonstrated the industry expertise needed to lead this agency forward, particularly as GSE reform conversations begin to intensify in Washington,” Smaby said.

The National Association of Federally Insured Credit Unions expressed its support for Calabria, and said it looks forward to working with him.

“Mark Calabria possesses a unique combination of policy, regulatory and housing expertise, and his nomination to lead the FHFA is well deserved,” NAFCU President and CEO Dan Berger said. “If confirmed by the Senate, NAFCU looks forward to working closely with Dr. Calabria to ensure a healthy, sustainable and viable secondary mortgage market.”

“In our numerous meetings with Dr. Calabria, it is clear he has a firm understanding of credit union issues and of the important role the GSEs play in their mission,” Berger said.

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