Bipartisan Committee Issues Report on Future of U.S. Housing - and Mortgage Bankers Issue Their Response: News Releases of the Week
Last week, a bipartisan commission of former Cabinet secretaries, ex-Senators, economists, and experts in various aspects of the American housing industry or market issued their report on how things are and how things should be in the future.
Read their report, entitled "Housing America’s Future: New Directions for National Policy" here.
Demographic shifts transform nation’s housing needs
Feb. 25, 2013
Washington, D.C. – A bipartisan commission of former Cabinet secretaries, former Senators and other leading housing and economic experts unveiled a new vision for housing policy today, which aims to further our nation’s economic recovery and improve the lives of millions of Americans. The recommendations propose scaling back the government role in the nation’s housing finance system and reforming housing assistance programs to better meet the needs of America’s most vulnerable households.
The commission is co-chaired by former Senate Majority Leader George J. Mitchell, former Senator Christopher S. “Kit” Bond, former Senator and HUD Secretary Mel Martinez, and former HUD Secretary Henry Cisneros, and includes 17 other individuals from diverse professional and political backgrounds.
The report from the Bipartisan Policy Center’s Housing Commission, entitled Housing America’s Future: New Directions for National Policy, proposes a new housing finance system that calls for a far greater role for the private sector, a continued but limited role for the federal government, the elimination of Fannie Mae and Freddie Mac, and reform of the Federal Housing Administration to improve efficiency and avoid crowd-out of private capital.
Through these reforms, the plan would address the broken mortgage finance system while creating a stable and strong housing market that provides greater taxpayer protection and supports a more vibrant economy.
“At this critical time in our nation’s history, we can no longer afford to defer bipartisan action on housing,” said the co-chairs in an op-ed in POLITICO today. “We believe our report can serve as a framework for Congress and the administration to act in the best interests of all Americans.”
“Profound demographic changes are transforming the country and our housing needs. The aging of the Baby Boomers, the formation of new households by millions of young Echo Boomers striking out on their own, and the increasing diversity of the American population will present new challenges and opportunities for housing providers and policy makers.”
The plan calls for reforms that would establish a new performance-based system for delivering federal rental assistance with greater devolution of responsibilities to state and local providers. The commission also proposes to shift existing resources to assist more effectively the most vulnerable households, and to preserve and expand the Low Income Housing Tax Credit program to increase the supply of affordable rental housing.
For first-time home buyers, the report emphasizes the importance of housing counseling as a means of preparing for homeownership. The commission recommends proposals to enable seniors to “age in place” safely and affordably while integrating housing with health care and other programs. For the one-third of Americans who live in rural areas, the commission recommends continued support for homeownership and rental assistance in those communities.
“Six years after the collapse of the housing market, the problems in housing remain as severe as ever and solutions continue to be elusive,” says the op-ed. “We hope [our report] will serve as a catalyst for action.”
To read the full report of the Bipartisan Policy Center’s Housing Commission, please visit http://bipartisanpolicy.org/library/report/housing-future.
WASHINGTON, D.C. (February 25, 2013) – David H. Stevens, President & CEO of the Mortgage Bankers Association (MBA), issued the following statement in response to the Bipartisan Policy Center’s Housing Commission (the Commission) report America’s Housing Future: New Directions for National Policy.
“The release of today’s report represents another important step forward in the debate over the future of the government’s role in housing. As the recovery in the housing market and the broader economy continues to gain momentum, it is critical that all stakeholders work together with policymakers to identify positive solutions that will support both owner-occupied and rental housing finance.
“There is widespread agreement that the government’s footprint in housing finance is currently too large. The Commission’s report rightfully highlights the need for a greater role for private capital in bearing credit risk, while also acknowledging the continued desire for a limited government function to ensure sufficient mortgage liquidity for qualified borrowers, particularly in times of market stress.
“We are pleased to see that the Commission’s framework closely follows that of MBA and others who have called for a new secondary mortgage market structure where private capital is placed in the first-loss position, with a federal backstop of mortgage backed securities (MBS) paid for by the entities that issue or insure the MBS. It is important that any secondary market proposal both meet policy objectives, in terms of ensuring secondary market liquidity, and support vibrant, dynamic, and competitive primary and secondary markets for the ultimate benefit of homeowners.
“The Commission also rightfully identifies a number of other issues facing lenders that are causing an overly tight credit environment that limits financing for qualified borrowers, including ‘put-back’ risk and uncertainty in regulatory mortgage rule-making.
“Likewise, the Commission’s report recognizes the important role of a robust rental housing market for the approximately 35 percent of Americans who do not own their own home. MBA shares the Commission’s concerns about the importance of a sufficient supply of multifamily rental housing, particularly for low-income families.
“As we have the opportunity to further digest the Commission’s report, MBA looks forward to working with the Commission to identify and discuss issues where our views may be divergent.”