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Idea of the Day: Reforming Our Housing Finance System

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It’s been almost five years since the bank bailouts and the federal takeover of mortgage giants Fannie Mae and Freddie Mac. Yet we are still far from determining what our future housing finance system will look like.

In the absence of reform, the federal government has been backing about 90 percent of new mortgages—a far-larger share than is historically normal, or than most observers think is sustainable. Meanwhile, private capital has shown little appetite in purchasing mortgages without a government guarantee, and it remains difficult for all but the most pristine borrowers to obtain credit to buy a home.

Since the start of the housing crisis, dozens of lawmakers, advocacy groups, academics, and industry stakeholders have offered visions of what our mortgage market should look like. In that time, we’ve seen a bipartisan consensus develop around increasing private capital’s presence in the market while maintaining explicit government support for the segment of the market traditionally served by Fannie and Freddie. But details of any future housing finance system must still be worked out, and Congress has only begun debating legislation to reform the system.

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Print: Allison Preiss (economy, education, poverty)
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Print: Tom Caiazza (foreign policy, health care, energy and environment, LGBT issues, gun-violence prevention)
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Print: Chelsea Kiene (women's issues, Legal Progress, Half in Ten Education Fund)
202.478.5328 or ckiene@americanprogress.org

Spanish-language and ethnic media: Tanya Arditi (immigration, race and ethnicity)
202.741.6258 or tarditi@americanprogress.org

TV: Rachel Rosen
202.483.2675 or rrosen@americanprogress.org

Radio: Chelsea Kiene
202.478.5328 or ckiene@americanprogress.org

 

This is part of a regular column: Idea of the Day

For more from the same column, click here