Presentation by CHFA
COMMITTEE ON JOINT FINANCE
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12:22 PM -- Presentation by Colorado Housing and Finance Authority
Mr. Milroy Alexander and Mr. Thomas Hemmings, representing the Colorado Housing and Finance Authority (CHFA), presented to the Joint Finance Committee. The presenters provided a handout, which is included as Attachment A.
Mr. Alexander provided background information about CHFA's organization, oversight, and Board of Directors. He also discussed the mission of the organization and the types of loans that CHFA finances. Mr. Alexander explained that CHFA is primarily a lender, providing loans for single family, multifamily, and military housing, as examples. Mr. Alexander explained that CHFA is not a subprime lender and has never made a subprime loan. He also said that 2006 and 2007 were record years of production for CHFA, and that production slowed in 2008. He stated that for several years, CHFA was a top producing state housing finance agency in the U.S. Mr. Alexander stated that despite recent successes, CHFA faces many challenges in the current economic environment.
Mr. Thomas Hemmings provided the committee with information about the overall housing market and CHFA's current financial condition. He discussed taxable bond costs and loan rates. Mr. Hemmings responded to questions from the committee about loan rates and Fannie Mae and Freddie Mac.
Mr. Hemmings continued his presentation, discussing the assets that CHFA holds, including total assets and net assets. He also provided information about operating revenue and income, and responded to questions from the committee about CHFA's total assets as well as bonds.
Mr. Hemmings provided statistics to the committee about the foreclosure rates in Colorado and the net charge-off for CHFA and Colorado banks. He continued by discussing the agency's bond program and the current ratings of CHFA by the credit rating entities. Discussion and questions ensued about the recent ratings that CHFA received.
Mr. Hemmings explained multifamily and single family bond indentures to the committee. He also discussed interest rate swaps and bond reserve investments.
Mr. Alexander returned and discussed how CHFA is responding to the current financial crisis. He stated that the agency needs investors to buy its bonds and also needs more liquidity. He discussed how CHFA is working at the federal level to bring assistance to state housing finance agencies. Mr. Alexander said CHFA is working to develop new lines of business for all the agency's programs. In addition, Mr. Hemmings discussed housing bonds and different financing structures being used by the agency.
Mr. Hemmings and Mr. Alexander responded to questions from the committee about the single and multifamily home loan programs. They also responded to questions about additional home loan issues, including the Federal Housing Administration (FHA) and programs for home buyers. Mr. Alexander said the agency is still reviewing the proposed federal legislation. Discussion ensued about assisting other homeowners that are struggling but are not in foreclosure.
Mr. Hemmings closed by encouraging individuals to contact their lending entities and call foreclosure telephone hot lines that are available to the public.