‘Foong on Finance’: GSE Reform Update
- Apr 01, 2011
It has been a busy week on the GSE and financial reform fronts.
There were hearings in both the Senate and the House on GSE reform. The Republicans in the House are reportedly planning to release a series of eight bills to curtail Fannie and Freddie. Proposed 5 percent risk-retention regulations, requiring lenders to have “skin” in the loans they make, have been released, and the government agencies are asking for public comment. In a released report, the inspector general of the federal Housing Finance Agency criticized high executive pay at Fannie and Freddie. And Mortgage Bankers Association Chairman Michael Berman testified before the Senate Banking Committee. Berman reaffirmed the need for a “certainty of the federal role” in GSE reform.
Is this the beginning of the end of the 30-year affordable home mortgage that has so far enabled many members of the Middle Class to buy homes and build equity they would not otherwise have? That will be good news to the apartment industry.
It appears both Obama and the Republicans are on the same page, agreeing on a need to eliminate Fannie and Freddie and the government’s role. With the single-family industry wounded, perhaps the apartment industry holds the stronger hand with the politicians in the White House and Congress.