Subcommittee Meets to Further Review Sustainable Housing Finance

Washington, DC  – (RealEstateRama) — The Subcommittee on Housing and Insurance held a hearing today entitled “Sustainable Housing Finance Part III.” The hearing allowed the Subcommittee to further assess views and perspectives on the need to enact comprehensive housing finance reform.

“I want to thank the panel for participating in the third meeting in our Subcommittee’s series of Housing Finance Reform hearings,” said Subcommittee Chairman Sean Duffy (R-WI). “Any new housing finance reform system should promote affordability, choice, and innovation.  Consumers should be able to have options as to what type of mortgage product meets their needs. Any reform must be based on market discipline. We cannot leave the taxpayers responsible for digging this nation out of another hole because of the risky bets the previous housing finance system enabled stakeholders to make.”

Key Takeaways

• America deserves a better housing finance system – one that’s designed for homeowners and taxpayers where every American works hard and plays by the rules so that they can have opportunities and make choices to buy a home they can actually afford to keep.

• America needs a housing policy that is sustainable over time, not one that causes endless boom-bust cycles in real estate that harm our economy.

• Reforming the housing finance system would ensure equal market access for lenders of all sizes and business models, allowing for more competitive prices to occur.

Topline Quotes from Witnesses

“The best and most effective housing finance reform would be to completely eliminate the government’s role in housing finance, and to let private capital and the private sector operate the housing finance system. There is nothing about the way the government has managed the housing finance system for the last 50 years that would remotely recommend a continuing government role.” –Peter Wallison, Senior Fellow and Arthur F. Burns Fellow in Financial Policy Studies, AEI

“Competition in the future system is necessary to ensure that mortgage borrowers are offered innovative loan products with attractive terms and interest rates.” –Dr. Mark Zandi, Chief Economist, Moody’s Analytics

“The current housing finance system has remained in a state of uncertainty for far too long, and the work of this Congress to return confidence, trust, and stability to the system will go a long way in restoring housing credit markets, stabilizing regulation, and reestablishing a well-functioning housing finance system in the United States. One clear lesson from recent years is that the country needs one solid, interconnected housing finance system that serves all people and protects taxpayers. “ –Alanna McCargo, Co-director, Housing Finance Policy Center, Urban Institute

“A safe and sound housing finance system should support the overall reduction of the public capital footprint as more private capital re-enters the system at different points in the primary and secondary mortgage markets.” –The Honorable Theodore “Ted” Tozer, Senior Fellow, Center for Financial Markets, Milken Institute