BOSTON, Dec. 19, 2017 /PRNewswire/ -- As tax reform negotiations come to an end and a bill is finalized, Congress must shift toward reforming the nation's unsustainable housing finance system, according to mortgage bankers across Massachusetts who say housing finance reform is the last piece of unfinished business from the 2008 financial crisis.
"It has been nine years since tax payers assumed guardianship of Fannie and Freddie," said Phil DeFronzo, President of Norcom Mortgage. "Congress and the Administration have been verbally steadfast in making housing finance reform a top priority. So now that a tax reform bill has passed Congress, hopefully lawmakers will shift their focus to addressing the future of the nation's housing market."
Fannie Mae and Freddie Mac were placed under government conservatorship – or legal guardianship – during the financial crisis in 2008. The move was intended to protect the U.S. housing system but instead resulted in a $187 billion taxpayer-funded government bailout. Nearly ten years later, these government-sponsored enterprises remain under the government's control, monopolizing the mortgage system and creating an unsustainable market.
"Massachusetts has one of the most expensive housing markets in the country, leaving many individuals and families unable to buy homes in their desired neighborhoods," said DeFronzo. "And because of the skyrocketing prices, potential homeowners and the young, educated workforce are fleeing to reside in other states. The uncertainty of our current housing finance system is bad for not only Massachusetts's economy, but for the nation's."
The Mortgage Bankers Association (MBA), the nation's leading advocate for the real estate finance industry, has laid out a proposal to overhaul the current housing finance system. The plan aims to expand access to credit, promote affordable housing, and support underserved market segments.
"Congress is the only one with authority to lock-in permanent positive changes that have occurred to Fannie Mae and Freddie Mac since the financial crisis. It's is imperative they tackle this ever important issue in the immediate future," said DeFronzo.
SOURCE Mortgage Bankers Association