Jul 26, 2011
After the debt-ceiling debate, can we talk housing?
26 Jul 2011
Posted by Andrew Kantor
With the potential for the Federal government to default on its debt the big issue in Washington these days, you’d almost forget that the housing market still needs a bit of attention.
According to a Housing Wire story, though, housing is next on the agenda (barring dealing with a default, that is).
For one, the Obama administration is working to extend the conforming loan limits, which are set to expire in October. (Click here for an explanation of why this is a huge deal.) As Housing Wire put it, “funding for mortgages outside Fannie, Freddie, or the Federal Housing Administration remains barren.” The question, according to Rep. Barney Frank (D-Mass.), is the right way to raise those limits.
Also on the post-debt-ceiling agenda: the fate of Fannie and Freddie.
Three bills that would restructure or eliminate those GSEs have been introduced — one by Reps. John Campbell (R-Calif.) and Gary Peters (D-Mich.), one by Rep. Jeb Hensarling (R-Texas), and one by Rep. Gary Miller (R-Calif.). But the chair of the House Financial Services Committee, Rep. Spencer Bachus (R-Ala.), has yet to allow any of them to be considered.
The committee has instead taken up minor Fannie/Freddie issues such as Freedom of Information Act requests, bailout funding, and executive legal fees, causing Campbell to call the discussions “out of order.”
“I think we need to have a debate over what can replace Fannie Mae and Freddie Mac in the future,” he said. (Bachus said he was waiting for the Obama Administration to introduce a bill instead.)
And then there’s the Consumer Financial Protection Bureau, which will be instrumental in creating the rules for qualified mortgages. But it can’t do much without a director. Former Ohio Attorney General Richard Cordray was nominated for the post, but the process, which would normally be a formality, has ground to a halt because, according to Housing Wire, “a group of 44 Republican Senators threatened to filibuster the approval [of Richard Cordray] until the president agrees to their terms for restructuring the agency.”
There are other housing issues on the agenda: the definition of QRMs, the National Flood Insurance Program, and more. But first, of course, we have to get past the debt-ceiling issue.