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Brown Meets at White House as Mortgage Reform Gains Steam

Brown with NAHREP President Jason Madiedo

NAR President Steve Brown met at the White House with the federal government’s top housing officer, HUD Secretary Shaun Donovan, and the head of the National Economic Council, Jeffrey Zients, on the reform of the secondary mortgage market yesterday. The effort to replace Fannie Mae and Freddie Mac is gaining steam with the release last week of a plan by the bi-partisan leadership of the Senate Banking Committee.

Sens. Tim Johnson, D-S.D., the committee chair, and Mike Crapo, R-Idaho, the ranking member, released a plan to phase out Fannie Mae and Freddie Mac over time and replace them with a new entity called the National Mortgage Insurance Corporation that would provide explicit federal backing of loans that meet standards of safety and soundness.

NAR is looking carefully at the plan, which incorporated many principles that the association is calling for. Top among them is the explicit federal backing, but the plan also ensures the continuation of the 30-year, fixed-rate mortgage and also paves the way for the return of a robust private market for mortgage-backed securities over time.

Although details are still to be worked out, NAR wants to be sure any mortgage market reform maintains the availability of safe and affordable loans.

Sen. Tim Johnson, D-S.D.

Sen. Mike Crapo, R-Idaho

After the White House meeting, which also included leaders of the National Association of Hispanic Real Estate Professionals, National Association of Home Builders, Mortgage Bankers Association, and Independent Community Bankers of America, Brown gave an interview with Housing Wire in which he stated that the housing sector will benefit from mortgage market reform if the reform is done carefully, because the market needs the stability that good reform will provide. “By settling this issue, it will bring stability to this market, which is critical,” Brown said in the interview. “The Great Recession shows that there are imperfections [to the current structure].”

One aspect to reform that REALTORS® can take pride in is the bipartisan nature of housing issues on Capitol Hill. Just as both sides of Congress came together earlier this month to pass curbs on escalating flood insurance premiums, members of both parties want reform to succeed so housing can thrive. “It affects every American,” he said. “Whether you are a Republican or a Democrat, people’s financial investments will be protected and maintained.”

With the Senate plan now out, lawmakers in that chamber could start consideration of legislation fairly soon, analysts say.

Summary of Senate reform plan.

More on NAR’s mortgage market reform principles.

Video: Why a federal guarantee is so important.

Robert Freedman

Robert Freedman is manager of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at rfreedman@realtors.org.

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Comments
  1. I see the summary made no mention of reforms to the condo financing requirements. Does anyone know if this was discussed at all, are there any plans in place to slacken restrictions on offering financing to condo buyers?

  2. Thomas Pollak

    First and foremost, the ‘mortgage-backed-security’ market is what caused the problems in the first place aided and abetted by the security rating companies predominately, S&P, Moody’s and Fitch, who all should be jailed. Therefore very serious attention should be paid to preventing this type of failure from again happening!!
    Second, what is this “National Association of Hispanic Real Estate Professionals” ?
    We are either REALTORS or we are not. I am not hyphenated in my name or in the services I provide to any of my clients whether Caucasian, Negro, Asian, native American of if they come from anywhere else. I am ashamed that NAR has not laid out our policy that recognizes all peoples serving and being served without differentiation or distinction. Having a distinction in the very name shows that we ARE UNPROFESSIONAL!

  3. Rosalie James

    How is it that back in the day when we did manual underwriting, Hud had Foreclosures but was in the black. Hud was pounding in our head to serve the underserved which of course was risky but they were the only government agency in the black.Is it because of volume on why is Hud continuing to raise the MIP. Is it because they have less volume due to stricter guidelines,? HUD never did no income qualifying loans, actually they didn’t do any loans during that period. What has changed to cause HUD to be more concerned about profits and more stringent in causing lenders to be afraid to do loans for fear they will lose their authority? With so much automation why don’t HUD spend more time on auditing documentation on fraudulent lenders and loan officers instead of everyone worrying about report cards. Ex-underwriter but never had any sanctions because I made sense of my approvals.

  4. John Wm. Devereux, Jr.

    I hope, as a real estate broker and father of children who have been greatly affected negatively by student loans, that these burdensome loans be given adequate review and consideraton with a resolution to lessen this burden and to allow more opportunity for purchase of a home,,,,,by making major credit reductions of the loan balances, of the interest rates, and of the large weight placed on such debt. This unfortunate situation needs to be addressed immmediately……as it will help releave unneeded pressure while encouraging and allowing for home purchases, and also allowing for increased availablity of more spendable income for our younger generation.

  5. It’s nice to see NAR leadership providing input on this important issue that affect most Americans.

    When Americans need a home bought or sold, they should always consult a professional Realtor®.

  6. Debbi Cadwallader

    My sentiments exactly, Thomas Pollak. As hard as we have worked to accept all peoples and appreciate all cultures what is the point for NAR singling out one group of Realtors? What’s next, the National Association of White Anglo-Saxon Protestant Realtors?

  7. simone hardy

    Thomas Pollak you used the “negro” to describe African-American or black clients that you work with? Very disrespectful and unprofessional

  8. Sandra Jackson

    I concur with Ms. Simone Hardy comment…

    “Thomas Pollak you used the “negro” to describe African-American or black clients that you work with? Very disrespectful and unprofessional”

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