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Public Proposals for the Future of the Housing Finance System

Testimony Before the Senate Committee on Banking, Housing and Urban Affairs

SOURCE: AP/Steven Senne

In this file photo taken January 10, 2011, a "for sale" sign hangs in front of a home in Millis, Massachusetts.

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CAP Senior Fellow Janneke Ratcliffe testifies before the Senate Committee on Banking, Housing and Urban Affairs. Read the testimony (CAP Action).

Good morning Chairman Johnson, Ranking Member Shelby, and members of the committee. I am Janneke Ratcliffe, a Senior Research Fellow at the Center for American Progress Action Fund and the executive director for the Center for Community Capital at the University of North Carolina at Chapel Hill.

Today I am especially honored to be asked to speak to you as a member of the Mortgage Finance Working Group. The members of this working group began gathering in 2008 to chart a path forward for the mortgage market. Our “Plan for a Responsible Market for Housing Finance” is the result. I will summarize our proposal, which is included in full in my written statement, but I speak only for myself in any views expressed here today.

Our collective experience and the three years we spent hashing out these issues has made us well aware of the difficult challenge you now face. The immediate task is to restore confidence in the housing market but we are also convinced that, long term, housing can continue to be core to Americans’ prosperity and economic security, and the foundation of middle-class opportunity. To meet this mission, housing finance reform must meet three key goals:

  • First, provide broad access to reasonably priced financing for both homeownership and rental housing so that more families, including the historically underserved, can have safe and sustainable housing options to meet their needs.
  • Second, preserve the 30-year fixed-rate mortgage, which allows families to fix their housing costs, build assets, and plan for their future in an ever more volatile economy.
  • And third, ensure that lenders, large and small, in communities large and small, can competitively offer the affordable, transparent, safe mortgage loans that borrowers need.

Our proposal achieves these goals by building on lessons from the past, both what went wrong and what was done right.

CAP Senior Fellow Janneke Ratcliffe testifies before the Senate Committee on Banking, Housing and Urban Affairs. Read the testimony (CAP Action).

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