DALLAS, June 1, 2017 /PRNewswire/ -- The Mortgage Bankers Association's (MBA) housing finance reform proposal has received backing from local Texas mortgage experts, who say the current system, which has been under the government's watch for nearly a decade, is unsustainable and relies too heavily on taxpayer security.
The government sponsored enterprises (GSE), Fannie Mae and Freddie Mac, were placed under government conservatorship nearly ten years ago to salvage the housing system from a financial crisis. When the market inevitably crashed in 2008, taxpayers were forced to bailout the housing system and pay the government $187 billion.
"Taxpayers have acted as a safety net for the U.S. housing system for far too long," said J. David Motley, President of Colonial Savings, F.A. "Placing Fannie Mae and Freddie Mac under the government's protection was supposed to be a Band-Aid, but nearly a decade later taxpayers still bear the burden of another financial crash. It is time for Washington to put away its political differences and get to work. The future of the housing market and economy depend on it."
The MBA's proposal, GSE Reform: Creating a Sustainable, More Vibrant, Secondary Mortgage Market, provides a detailed roadmap of how a reformed housing finance system can promote access to credit for prospective homeowners, develop and preserve affordable rental housing, and support underserved market segments.
Specifically, the market would no longer be dominated by the government, putting private capital at risk rather than taxpayer dollars. The plan would enhance stability and competition in the mortgage system with multiple Guarantors operating as privately-owned entities. These Guarantors would also be required to meet several affordable housing requirements to ensure all needs of the U.S. housing system are met.
"The MBA's plan would finally end the status quo and do away with the government duopoly that is the U.S. housing finance system," said Motley. "It would address the housing market's reliance on government and taxpayer support and encourage more competition in the mortgage market, resulting in better access to credit in the most rural areas of Texas.
"Many in Congress and the Trump administration have deemed housing finance reform a top priority. If they are serious about creating a stable and energetic housing market for decades to come, I encourage them to use the MBA's plan as a guideline."
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SOURCE Mortgage Bankers Association