WASHINGTON–A White House memorandum outlining mortgage finance reform could “mark the beginning of major changes in how consumers, lenders and investors access and finance home mortgages,” but it also may not amount to much when the policies are finally written, according to the Consumer Federation of America (CFA).
The CFA said it supports many of the principles outlined by the White House, but also cautioned, “how quickly such changes could come, and whether Congress has the appetite or ability to navigate the complex and conflicting interests that have stymied reform for the past 10 years is unclear.”
The White House memo calls for moving both Fannie Mae and Freddie Mac out from under the federal government conservatorship under which they have operated since the housing crisis.
“The White House announcement definitely raises the stakes in this discussion,” said Barry Zigas, CFA’s Director of Housing Policy, in a released statement. “We are pleased that it endorses some important fundamental principles that CFA and others have promoted for years. But converting these into actual policy execution remains a big challenge, where the outcome and progress remain uncertain.”
‘Shortchanged Consumers’
Zigas said any changes in mortgage finance must sustain a commitment to using the federal government’s support to foster affordable credit across the broadest possible range of credit worthy borrowers and communities.
“The U.S. mortgage finance system has shortchanged too many consumers for too long – particularly African-Americans and Latinos, and low- and moderate-income consumers and communities,” Zigas said. “Any reforms, whether through administrative or congressional action must insure that there is the fullest possible access to affordable and sustainable mortgage credit.”
The CFA noted the memo also expands the conversation about mortgage finance reform beyond the GSEs to include the other government supports for the housing system, including HUD/FHA, Ginnie Mae, VA, RHS and the Federal Home Loan Banks.
“We strongly support a comprehensive approach and commend the Administration for highlighting the importance of the larger federal support system for housing finance,” Zigas said.