In this report, we assess the first of a series of House FinServ hearings on housing finance reform, with Republicans today targeting the GSEs’ exemption from the QM rule, rather than broader questions about what to do with the conservatorship.  Chairman Hensarling (R-TX) and Rep. Duffy (R-WI) argued that the QM’s debt to income requirements should apply to the GSEs or be removed to ensure a level playing field.  FHFA Director Watt defended current practice and said that the CFPB is in the process of reevaluating the rule as required by statute.  Turning to broader issues, Ranking Member Waters (D-CA) warned that any attempt by Chair Hensarling to push the PATH Act would once again face fierce Democratic opposition, arguing that housing reform should include an explicit, paid-for government backstop, promote affordability, protect the 30-year FRM, preserve the housing trust fund, support the multifamily housing market, and ensure equal market access. 

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