Housing advocate: Congress should focus on fixing – not replacing – Fannie and Freddie

by Ryan Smith20 May 2014
Congress should go back to the drawing board on its plans for reforming Fannie and Freddie, says the head of a housing advocacy group.

The Senate is currently considering a bill, written by Banking Committee Chairman Tim Johnson (D-S.D.) and Ranking Member Mike Crapo (R-Idaho), that would dismantle Fannie and Freddie and replace them with a new federal mortgage insurer. But in a column for the Huffington Post, National Community Reinvestment Coalition President and CEO John Taylor said the bill presented “serious problems for working Americans.”

“If the bill in its current form became law, it would do enormous harm to homeownership opportunity,” Taylor wrote. “The bill must not be given a floor vote in the Senate.”

Instead of dismantling Fannie and Freddie, Taylor wrote, Congress should focus on repairing them. He argued that the mortgage finance giants needed to be regulated properly and operated transparently, and that they needed to maintain sufficient cash reserves.  Eliminating them, however, would be “reckless and foolish,” he wrote.

“There has been an ill-advised and misplaced push to get rid of Fannie Mae and Freddie Mac. Doing so would be a mistake,” he wrote. “Fannie Mae and Freddie Mac have affordable housing goals, which help to make sure that the market serves underserved communities, and which have had a tremendous positive impact.”

The current bill eliminates affordable housing goals and doesn’t do enough to ensure that all creditworthy borrowers have access to mortgage credit, Taylor wrote.

“The bottom line is that less conventional lending to creditworthy families means fewer homeowners, which hurts communities and the economy at large,” he wrote. “Therefore, making sure that responsible credit is made available to all creditworthy borrowers is in our national interest.”


 

COMMENTS

  • by Larry | 5/20/2014 10:44:01 AM

    Read Mr. Taylors comments, at least someone has a little c9ommon sense.

  • by Cheryl M | 5/20/2014 11:29:55 AM

    Hip Hip Hooray!!!! Now Taylor needs to get together with those Democ. that took themselves out of the vote for this "Crapo" Bill ...Warren, Schumer etc....and etch some common sense into a BIll that will actually do just that, fix not dismantle. Our housing is already at a sensitive state this would cause another housing collapse (something we don't need right now)

  • by Stan J | 5/20/2014 12:23:18 PM

    Two entities with a history of scandals involving malfeasance and mismanagement are called upon to "regulate" others. That is what is wrong with our system.
    It is time for the private sector to step up and sponsor its own mortgage insurance plan and regulation of the mortgage industry instead of relying upon taxpayer subsidies as do the Wall Street Banksters. We have too many money-changers and not true capitalists in the real estate industry.

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