Federal Housing Finance Policy Examined

This story appeared in Bank Digest.

The Bipartisan Policy Center has issued a report examining issues it has determined to be essential to a resilient housing system. According to the report, these include:

• a responsible, sustainable approach to homeownership that will help ensure that all creditworthy households have access to homeownership;
• a reformed system of housing finance in which the private sector plays a far more prominent role in bearing credit risk while promoting a greater diversity of funding sources for mortgage financing;
• a more targeted approach to providing rental assistance that directs scarce resources to the lowest-income renters while insisting on a high level of performance by housing providers; and
• a more comprehensive focus on meeting the housing needs of seniors.

Sen. Bob Corker, R-Tenn., a member of the Banking, Housing and Urban Affairs Committee, commended the proposal for focusing on putting "substantial private capital in front of the government" and "resolving the legal limbo" of government-sponsored enterprises Fannie Mae and Freddie Mac, which own or guarantee roughly half of all U.S. mortgages at a total value of more than $5 trillion. Corker stressed that since Fannie and Freddie were taken into government conservatorship in 2008 they have cost taxpayers $137 billion.