Sen. Warren sounds the alarm on irresponsible housing reform
Sen. Elizabeth Warren, D-Mass., outlined five key steps the mortgage market must take to achieve housing finance reform without disrupting the entire system.
While speaking at the Mortgage Banker’s Association 100th Annual Convention and Expo, Sen. Warren made it crystal clear to a massive crowd that reform is 'absolutely necessary.' Yet, she urged Congress to act carefully, saying any hiccup during the creation process will hit middle-class taxpayers the hardest.
"No politics here — we just need to focus on getting housing finance right," the Senator stated.
As a result, Warren has outlined five initiatives that she claims will address moral hazard risk while preserving the good aspects of the pre-crisis housing finance system. She struck a more populist tone by suggesting there's a definite need to scale back the influence of Fannie Mae and Freddie Mac, replacing them with a privately financed guarantee for whatever entity takes over the enterprises.
The guarantee will be limited and conditioned on private capital occupying significant first loss position — making the 30-year fixed mortgage broadly available.
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http://www.housingwire.com/articles/27682-sen-warren-sounds-the-alarm-on-irresponsible-housing-reform
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