DOT, HUD Report | Reforming America’s Housing Finance Market

REFORMING AMERICA’S
HOUSING FINANCE MARKET
A REPORT TO CONGRESS

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INTRODUCTION

This paper lays out the Administration’s plan to reform America’s housing finance market to better serve families and function more safely in a world that has changed dramatically since its original pillars were put in place nearly eighty years ago.

Our plan champions the belief that Americans should have choices in housing that make sense for them and for their families. This means rental options near good schools and good jobs. It means access to credit for those Americans who want to own their own home, which has helped millions of middle class families build wealth and achieve the American Dream. And it means a helping hand for lower-income Americans, who are burdened by the strain of high housing costs.

But our plan also dramatically transforms the role of government in the housing market. In the past, the government’s financial and tax policies encouraged housing purchases and real estate investment over other sectors of our economy, and ultimately left taxpayers responsible for much of the risk incurred by a poorly supervised housing finance market.

Going forward, the government’s primary role should be limited to robust oversight and consumer protection, targeted assistance for low- and moderate-income homeowners and renters, and carefully designed support for market stability and crisis response. Our plan helps ensure that our nation’s economic health will not be jeopardized again by the fundamental flaws in the housing market that existed before the financial crisis. At the same time, this plan recognizes the fragile state of our housing market and is designed to ensure that reforms are implemented at a stable and measured pace to support economic recovery over the next several years.

Under our plan, private markets – subject to strong oversight and standards for consumer and investor protection – will be the primary source of mortgage credit and bear the burden for losses. Banks and other financial institutions will be required to hold more capital to withstand future recessions or significant declines in home prices, and adhere to more conservative underwriting standards that require homeowners to hold more equity in their homes.

Securitization, alongside credit from the banking system, should continue to play a major role in housing finance subject to greater risk retention, disclosure, and other key reforms. Our plan is also designed to eliminate unfair capital, oversight, and accounting advantages and promote a level playing field for all participants in the housing market.

The Administration will work with the Federal Housing Finance Agency (“FHFA”) to develop a plan to responsibly reduce the role of the Federal National Mortgage Association (“Fannie Mae”)
and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) in the mortgage market and, ultimately, wind down both institutions. We recommend FHFA employ a number of policy levers – including increased guarantee fee pricing, increased down payment requirements, and other measures – to bring private capital back into the mortgage market and reduce taxpayer risk. As the market improves and Fannie Mae and Freddie Mac are wound down, it should be clear that the government is committed to ensuring that Fannie Mae and Freddie Mac have sufficient capital to perform under any guarantees issued now or in the future and the ability to meet any of their debt obligations. We believe that under our current Preferred Stock Purchase Agreements (PSPAs), there is sufficient funding to ensure the orderly and deliberate wind down of Fannie
Mae and Freddie Mac, as described in our plan.

Successful reform will require more than just winding down Fannie Mae and Freddie Mac and reducing other government support to the housing market. In addition to fully implementing the reforms in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) (Pub. L. 111-203), the Administration will mobilize all tools available to address the nation’s broken system of mortgage servicing and foreclosure processing. Taken together, these steps will help restore trust in the underlying foundation of the mortgage market so borrowers, lenders, and investors have the confidence to purchase a home, issue a loan, or make an investment.

The government must also help ensure that all Americans have access to quality housing that they can afford. This does not mean our goal is for all Americans to be homeowners. We should continue to provide targeted and effective support to families with the financial capacity and desire to own a home, but who are underserved by the private market, as well as a range of options for Americans who rent their homes.

Finally, our plan presents several proposals for structuring the government’s long-term role in a housing finance system in which the private sector is the dominant provider of mortgage credit. We evaluate these proposals according to their effects on four key criteria: access to mortgage credit; incentives for investment in the housing sector; taxpayer protection; and financial and economic stability. We ask Congress to work with us to determine the right balance of priorities for a new, predominantly private housing finance market as soon as possible.

Reform will not come overnight. Some reforms can take place immediately, like improvements to consumer protection and government oversight, while others will be implemented more gradually as the housing market heals.

We welcome the opportunity to work with Congress, independent regulators and agencies, and a wide range of stakeholders and partners to meet the goals laid out in the pages below.

Full report below…

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4closureFraud.org

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Reforming America’s Housing Finance Market

Comments
7 Responses to “DOT, HUD Report | Reforming America’s Housing Finance Market”
  1. l vent says:

    Kinda think they might be thinkin there are way to many holes in their pirate ship. The jig is up. They are a ALL a sham and a fraud, FROM TOP TO BOTTOM AND INSIDE OUT AND EVERYPLACE IN BETWEEN. They claim it is “illegal” for us to print money, but not them. The money they print has no more value than the play money inside a Monopoly game. Would my county possibly except a property tax payment in Monoply money? There is no difference in the value of the two. Greenbacks are only legit because they say so not because there is anything of any value that secures it. Everything is a sack of shit and a lie. The U.N. declared that: We are all human capital in Exec order 13037. How sick and nauseating these people are. I believe they would literally gamble on their own mother’s souls if they thought they could make money off of it. National Sovereignty will soon prevail. They are ALL quite frankly, despicable.

  2. fighting mad, mad as hell says:

    The game is over!
    Even a blind man can see all the fraud, deception, outright theft and cheating that is going on!
    We refuse to play this stinking game any more!
    Enough is enough!
    The first thing that should be done is eliminate any connection to selling of the notes, no securitizations, MBS or any other creative use of OUR MORTGAGES.
    Until the original borrow pays off that mortgage, no one is allowed to touch it! The same should go for any kind of long term loan that can be bundled and sold AFTER THE DEAL IS MADE!
    And make these banksters pay back every county, city and state that was cheated out of recording fees on multiple transfers.
    Anything less is a joke, bad joke on the people.
    I hate it when they try to play us for stupid, make it sound like a good idea but is really the “HEADS I WIN, TAILS YOU LOSE” SCAM
    Yeah, convince me you are doing me a favor!
    NOT!
    To the Feds I say, save your lipstick and dump the pig!

  3. fighting mad, mad as hell says:

    I can see them slapping themselves on the back for this great plan they’ve been working on ever since the shit hit the fan and the world got wind of the scam!
    Another plan that will fail in a year or two.
    It’s the “Same shit, different day” plan.
    Nothing will change, the banks will still be in charge, make the rules, foreclosures are to continue until the last of the homes been milked dry of every dime, they will have the govt blessings and continue to use our homes as their private ATM’S thru securitizations.
    If the bankers weren’t playing by the rules in the first place, what makes them think that adding more rules the bankers will ignore is gonna change ANYTHING?
    Yes, by all means let the bankers keep right on freely stealing, cheating, scamming the public, by all means! THAT’S THE TICKET TO RECOVERY, YES INDEEDY!
    And they are planning on dragging this pretend recovery for years and years.
    Maybe they want people to start dragging bank presidents out offices and taking turns beating the crap out of them?
    Ghandhi was right!
    We now know that peaceful protesting in the street works!

    They can slap lipstick on this pig and it will still be a pig!
    The original mortgage plan called for no mortgage to be longer than 10 yrs.
    Nobody should be a slave to a loan for 30 yrs!
    Moving up to a more expensive home with bigger notes is not progress, it’s still slavery to a note.
    But the truly insulting part of this new GAME is blaming the homeowners for the meltdown, as though we were in charge of the sleazy underwriting and scams concocted by the bankers!
    And then there is the sly reference to making it easier for “THOSE WHO HAVE THE FINANCIAL CAPACITY AND DESIRE TO OWN A HOME.”
    SWEET! IF YOU AIN’T GOT THE CASH, TOUGH LUCK FOR YOU!
    Next there is the only slightly veiled reference of “WE DON’T MEAN FOR ALLAMERICANS TO OWN A HOME!
    Hell no! We must have renters, owning a home will become a reserved gift to the rich.
    But they promise to make sure that we can get rental housing that is more affordable.
    What’s next? Only landowners can vote!?
    What the hell ever happened to the I own my home and I sell it to you at a fair price and you can pay it off in less than 10 yrs.
    Or maybe middle income homes shouldn’t be priced in the million dollar bracket in the first place.

  4. l vent says:

    I smell a rat. It’s a cover-up, right in the faces of the AMERICAN PEOPLE who they have been FINANCIALLY RAPED, PILLAGED AND ROBBED BLIND and THEY ARE STILL DOING IT EVERYDAY via the FEDERAL RESERVE, BERNANKE and the rigged NYSE. THEY ARE ALL THE BIGGEST ROBBER BARONS IN the HISTORY of MANKIND. THERE IS NO MAKING NICE. THEY HAVE PRACTICALLY COMPLETELY SOLD OUT AND DESTROYED OUR ENTIRE NATION.. THEY ALL NEED TO GO AWAY PERMANANTLY. DISOLVE OR DISMANTLE THE IMPERIALIST OLIGARCHY OR AMERICA WILL BE NO MORE. They do nothing but LIE and COVER-UP and continue to STEAL from us and the world. THEY ARE EVIL INCARNATE.

  5. John R. says:

    Ok, call me thick headed, but why in the world is the Department of Transportation (DOT) even involved in this mess?

    And with highway bridges falling, pot holes in some places the size of my motorhome, and the State of Georgia obviously overrun by uncontrollable “breeding orange barrels”, do we even want them involved?

    What, instead of standing around “on site” in groups of 5 they want to hang out in foreclosed houses?

    I can see it now… whole neighborhoods… foreclosed houses… porta potties on every 3rd yard!

  6. Kathleen Burt says:

    But shouldn’t we also get rid of securitization? It seems to be the major problem behind MERS fraud; unregistered titles, difficulty in establishing chain of title and getting title insurance. Unless these problems are fixed, buyers will continue saying foreclosures and short sales are no bargains, regardless of how low the property drops?.

    • l vent says:

      I read something on wordpress.com that the whole securitization process is an illegal scam too. A MIND GAME they use TO MAKE YOU PAY or make you THINK you will lose your home if you don’t pay. I read that securitization really does not exist and that 97% of the debt in this country is really unsecured. It is a mind game scare tactic by the ELITE 1%. It makes sense if we think about the fact that our CURRENCY IS JUST WORTHLESS PAPER ANYWAY, only worth maybe, the paper it is printed on. It is no more that FIAT CURRENCY with no monetary value and they planned it that way so they could BANKRUPT THE ENTIRE PLANET with their MONEY PRINTING MACHINE. EVERYTHING IS A FRAUD AND A GIGANTIC LIE. THEY HAVE NEARLY DESTROYED THE WORLD BY THEIR CONTINUOUS DECEIT SO THEY CAN CONTROL EVERYONE AND EVERYTHING ON THE PLANET WITH THESE LIES.

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