November 9, 2023
(Washington D.C.) – The Community Home Lenders of America (CHLA) has again written to the White House and Treasury on the need to reduce the record-high spread between mortgage money and the risk-free 10-year Treasury coupon. This lack of action harms the VA mortgage which is an earned benefit to our servicemembers that provides them a chance to buy a home with no money down.
“Today, with no Federal Reserve, Fannie Mae, or Freddie Mac to act as buyers of last resort to stabilize mortgage rates, our nation’s military personnel are often forced to come to the closing table with thousands of dollars cash to close on a home, which is effectively a violation of the social compact between the United States and our military families, precisely because it removes a promised benefit to these families—a true no-down mortgage program.”
CHLA sent a letter in October, signed by National Association of Realtors and the Independent Community Bankers of America, providing two key recommendations to reduce this historically high spread:
- The Fed should stop its ongoing MBS book runoff by buying the amount of the runoff, so to not be a net drag here on pricing, and;
- Treasury (with FHFA) ought to allow Fannie and Freddie to buy MBS in a set amount, for a set period of time, to reduce these extra-high consumer mortgage costs.