By NAR 2013 President Gary Thomas
A bipartisan group of Senators introduced the Corker-Warner bill (S.1217) on Tuesday. This legislation is comprehensive, bipartisan and detailed beyond what we’ve seen so far. It would remake the role of the federal government in mortgage finance.
As you know, Fannie Mae and Freddie Mac play a key role in the secondary mortgage market, which is crucial in providing capital for mortgage lending. During the housing finance sector’s collapse, private capital withdrew from the market and from having a significant, competing role with the GSEs. At that time, GSE and FHA-insured loans made up nearly 90 percent of the market.
NAR supports replacing Fannie Mae and Freddie Mac with a non-shareholder owned authority or authorities. In our view, the new entity should be subject to tighter regulations on product, revenue generation and usage, and retained portfolio practices in a way that ensures the mission of the GSEs continues to meet the needs of consumers while protecting taxpayers. Moreover, it should be managed in such a way as to encourage private capital’s participation in the secondary mortgage market.
The Corker-Warner bill would replace Fannie Mae and Freddie Mac with a new guarantor, the Federal Mortgage Insurance Corporation. It would offer reinsurance of mortgage securities if private creditors ever reached another crisis in the future. This retention of the federal guarantee for mortgage securities is critical to REALTORS.
I believe the proposed legislation should be hailed as an important first step toward finding a bipartisan solution that would protect taxpayers, but keep mortgages available to consumers.
So, know that all the visits we made to Capitol Hill during Midyear, urging lawmakers to move forward on comprehensive, bipartisan housing finance legislation have paid off.
Ladies and gentleman, we have a bill. This will allow all stakeholders to engage in a larger discussion with Congress as we move forward.