Can anyone tell me how anything said by these Senators in any way would lead anyone to think the GSE’s are going anywhere? Or does it lead one to believe they are going to get bigger and more important……if so, then doesn’t it stand to reason and logic that something has to change with the conservatorship? Doesn’t it???
Liberal lawmaker: Start anew on housing reform
Sen. Sherrod Brown (D-Ohio) said Tuesday that the Senate Banking Committee should start from scratch next Congress on housing finance reform.
Banking Committee Chairman Tim Johnson (D-S.D.) and ranking member Mike Crapo (R-Idaho) were able to move a bipartisan housing reform package through Committee in May on a 13-9 vote.
Liberal members — including Sens. Charles Schumer (D-N.Y.), Elizabeth Warren (D-Mass.) and Jeff Merkley (D-Ore.) as well as Brown — opposed Johnson-Crapo because they said it didn’t do enough to address affordable housing for lower-income Americans.
The lack of liberal support tanked Johnson-Crapo’s chances of garnering a Senate floor vote this Congress and deprived Johnson of a key legislative victory before he retires at the end of this session.
Brown, who will likely be ranking member of the Committee in the next Congress, said that he is “absolutely” interested in taking up housing reform in the next Congress.
Sen. Richard Shelby (R-Ala.) is poised to become the next chairman of the Committee.
But as for whether Johnson-Crapo should be the foundation for housing finance reform?
“No,” Brown said. “I think we start over… You don’t start with their bill. That legislation would have led to more bank concentration.”
Brown’s comments come as the housing industry is trying to gauge how the next Congress will address the housing market — the last remaining major issue left over from the 2008 financial crisis that lawmakers haven’t addressed.
Johnson-Crapo was months in the making. It built on a housing-finance plan that was originally formulated by Banking committee members Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.).
The issue clearly divided the centrist Democrats from the more progressive members of the Committee, including Brown and Warren.
Johnson-Crapo would eliminate Fannie Mae and Freddie Mac, the two mortgage finance giants that taxpayers bailed out following the financial crisis. The Johnson-Crapo proposal would create a new government entity that lowers taxpayer risk.
“The status quo is not great but the status quo would’ve been better than their sort of Rube Goldberg-kind of legislation,” Brown said.
On Wednesday, Federal Housing Finance Agency Chairman Mel Watt will testify before the Senate Banking. He could provide more clues about how the administration will look to handle the issue with the Republican-controlled Congress.
“I want to see what he’s going to do on housing reform,” Brown said.
Earlier this week, Housing and Urban Development Secretary Julian Castro said that overhauling the mortgage finance system remained a top priority for the administration.
“This could be, I believe, a good victory either in the lame-duck session or, more realistically, perhaps in the next term of Congress where there is bipartisan support for housing finance reform, for doing away with Fannie and Freddie as we’ve known them, creating a backstop,” Castro said on Bloomberg Television on Monday.
Washington, DC –(ENEWSPF)–November 18, 2014. United States Senators Elizabeth Warren (D-Mass.) and Mark Warner (D-Va.) today wrote a letter to Federal Housing Finance Agency (FHFA) Director Melvin Watt urging the agency to take steps “to build a housing finance infrastructure for the future, enhance the role of private capital in the agency mortgage-backed security (MBS) market, and responsibly increase access to mortgage credit.”
The senators highlighted six areas where further FHFA action can advance these goals: (1) developing a single security for Fannie Mae and Freddie Mac mortgage-backed securities; (2) creating the Common Securitization Platform (CSP) as an independent, transparent, and more efficient securitization infrastructure; (3) continuing experimentation in risk-sharing pilot programs; (4) creating specific, uniform, and public regulations for private mortgage insurers that insure loans guaranteed by Fannie and Freddie; (5) expanding and improving the First Look program; and (6) updating the credit scoring models that Fannie Mae and Freddie Mac use.
“Millions of creditworthy families are struggling to get mortgages and buy a home,” said Senator Warren. “We believe FHFA can use its existing authority to extend credit to responsible families and, at the same time, prepare the housing finance system for the end of government conservatorship.”
“While we work in Congress to pass comprehensive housing finance reform, we are asking FHFA to move responsibly and transparently as they lay the foundation for a system that better protects taxpayers and improves access to credit for homeowners,” said Senator Warner.