Jul 07, 2011
Secondary mortgage market reform: We have a bill
07 Jul 2011
Posted by Andrew Kantor
Just released from NAR: “Realtors® Support Bill for Comprehensive Reform of Secondary Mortgage Market.”
The long-term viability of America’s housing finance market requires comprehensive reform of the secondary mortgage market. Toward that end, the National Association of Realtors® supports H.R. 2413, the “Secondary Market Facility for Residential Mortgage Act of 2011.”
What does the bill — introduced yesterday by Reps. Gary Miller (R-Calif.) and Carolyn McCarthy (D-N.Y.) — do to Fannie and Freddie? Pretty much what we’ve been saying all along needs to be done: Keeps the secondary market private, but gives the federal government the role (in the form of an as-yet-unnamed entity) of ensuring that capital remains available even when times get tough.
"[H]aving only private capital as the sole source of housing finance could severely restrict mortgage capital and result in a system that is dominated by a few large banks that are “too-big-to-fail” at the expense of consumers.
This new government entity (think of it as the successor to Fannie and Freddie) would not have shareholders, and its sole purpose would be "to facilitate the flow of mortgage capital and provide liquidity during all market conditions."
Obviously we’ll keep you updated on the bill, how you can help, and what specifics emerge.