NEW YORK, April 29, 2014 /PRNewswire/ -- Today, a broad partnership of businesses, civil rights organizations and trade associations announced the launch of United for American Homeownership (UAH), a coalition dedicated to supporting communities by preserving and strengthening Fannie Mae and Freddie Mac.
"For decades, Fannie Mae and Freddie Mac have been the backbone of a healthy housing market, ensuring affordability and access to the dream of American homeownership," said former Senator Bob Kerrey, a member of the UAH Board of Directors. "But now Congress is considering legislation that could knock the housing market off track and keep many hardworking families from achieving the American dream of homeownership. Eliminating trusted institutions like Fannie and Freddie is a dangerous idea, and one that United for American Homeownership is prepared to fight all the way."
"Homeownership is what catapulted America to the top of the world's economy," said Harry Alford, a member of the UAH Board of Directors and President and CEO of the National Black Chamber of Commerce. "Without question or debate it was an increasing personal equity that developed our middle class and a legacy to be handled down to our heirs. Let us be careful in restoring the American Dream back to its healthy state."
Fannie and Freddie are integral to our housing finance market, owning or guaranteeing over half of all U.S. mortgages and over 65 percent of new ones. Rather than making loans directly, these critical institutions purchase them from lenders, creating a secondary market that allows lenders to sell mortgages in order to write more new loans – even in tough times – and ultimately expand the universe of borrowers.
The U.S. Senate Banking Committee will soon vote on a proposal, known as the Johnson-Crapo bill, which: (i) seeks to eliminate Fannie and Freddie while explicitly adding over $5 trillion in debt obligations to the Federal balance sheet; (ii) will establish a massive new government regulator; (iii) will consolidate more power in Wall Street's biggest banks; and (iv) will cause significant disruptions to the housing market, threatening America's economic recovery.
In seeking to dismantle Fannie and Freddie, the Johnson-Crapo plan threatens to disrupt the housing market by throwing into question the future of the 30-year fixed-rate mortgage. In addition, analysts from Barclays Capital and Moody's Analytics both estimate that mortgage rates would significantly rise under any plan to dissolve Fannie and Freddie, affecting affordable housing for many Americans.
Dissolving Fannie and Freddie would also break a promise the government made when it asked Americans to invest in the companies to help support the housing recovery. Under the Johnson-Crapo plan, investors who believed in this promise – including retirees, pension funds and so many others who devoted hard-earned resources to support these companies – would be forced to take a total loss.
UAH's campaign brings together Americans of all political stripes who support preserving access to the dream of homeownership. The broad coalition behind UAH consists of: The National Black Chamber of Commerce, RetireSafe, National Consumer League, National Organization for Women, Fair Housing Advocates Association and Fairholme. Each of these organizations has pledged to come together to build public support for Fannie and Freddie, and to raise awareness for the vital role they play in expanding opportunity for American families.
Leading the effort to educate the public on the vital role Fannie and Freddie play in today's housing market, the Board of Directors includes:
- Bob Kerrey, former United States Senator
- Harry Alford, president and CEO, National Black Chamber of Commerce
- Josh Angel, attorney, Herrick, Feinstein LLP
To learn more about United for American Homeownership, including information for organizations interested in joining and supporting the coalition's efforts, please visit our website at www.unitedforhomeownership.com.
SOURCE United for American Homeownership