(June 2, 2017) – The Mortgage Bankers Association (MBA) housing finance reform proposal has received backing from local Wisconsin mortgage experts, who say the current system, which has been under the government’s watch for nearly a decade, is unsustainable and relies too heavily on taxpayer security.
The government-sponsored entities (GSE), Fannie Mae and Freddie Mac, were placed under government conservatorship nearly ten years ago to salvage the housing system from a financial crisis. When the market inevitably crashed in 2008, taxpayers were forced to bailout the housing system and pay the government $187 billion.
“Housing finance reform remains the last piece of unfinished business since the U.S. financial crash in 2008,” said Joe Doyle, President of the Wisconsin MBA. “Lawmakers have agreed for years that reform needs to happen. But, political gridlock has ceased any legislative action and is jeopardizing the real estate market in Wisconsin, and across the country.”
The MBA’s proposal, GSE Reform: Creating a Sustainable, More Vibrant, Secondary Mortgage Market, provides a detailed roadmap of how a reformed housing finance system can promote access to credit for prospective homeowners, develop and preserve affordable rental housing, and support underserved market segments.
Specifically, the market would no longer be dominated by the government, putting private capital at risk rather than taxpayer dollars. The plan would enhance stability and competition in the mortgage system with multiple Guarantors operating as privately-owned entities. These Guarantors would also be required to meet several affordable housing requirements to ensure all needs of the U.S. housing system are met.
“The MBA’s approach addresses the full scope of housing needs,” said Doyle. “It provides the liquidity needed for credit, protects taxpayers, and offers a solution to the growing need for affordable housing.
“This plan should serve as a blueprint for Congress if they are committed to creating a booming and viable housing market for decades to come.”