February 11, 2011

Supporting Affordability and Accessibility Through Housing Finance Reform

This morning, Treasury Secretary Tim Geithner and I unveiled the Obama Administration’s release of a strong plan to fix the fundamental flaws in the mortgage market and improve the way government supports affordable homeownership and rental housing. The plan puts real ideas on the table to preserve access and affordability for years to come in our housing markets.

Much of that work began with the Obama Administration’s work to help stabilize the housing market and provide critical support for struggling homeowners. Whether it was working with Congress to put in place expanded tax credits for first-time homebuyers and provide additional support at the state and local levels, unveiling our mortgage modification and housing counseling programs to keep responsible families in their homes, or providing ongoing financial support for Fannie Mae and Freddie Mac following the Bush Administration’s decision to place them into conservatorship, this Administration moved swiftly to preserve access to our mortgage markets at a moment they were threatening to seize up entirely.

But now the time has come to reform the housing finance system and shrink the government’s current footprint in it while ensuring that Americans still have access to quality housing they can afford.

As the report makes clear, this Administration believes this should involve supporting a range of affordable options. While sustainable homeownership founded on safe mortgages continues to be an important source of stability and opportunity for American families, that doesn’t mean every American should become a homeowner. Indeed, this report makes clear that this Administration believes there should be a range of affordable options for the millions of Americans who rent as well.

That’s why the Administration’s new report recommends initially focusing on four primary areas:

First, by reforming and strengthening the FHA.

• We will continue to ensure that creditworthy borrowers that have incomes up to the median level for their area have access to affordable mortgages – and we will do so in a way that is healthy for FHA’s long term finances. We will consider options such as lowering FHA’s maximum loan-to-value ratios for qualifying mortgages to ensure it remains financially sound and able to continue its mission providing access to homeownership for first-time homebuyers and underserved markets.
Second, by providing targeted, transparent support for affordable rental housing.

• Right now, half of renters spend more than a third of their income on housing – and a quarter spend more than half. And more support for rental housing is directly related to encouraging the return of private capital. One option, as we shrink FHA’s footprint in the single-family market, could be to share risk with private lenders to expand FHA’s capacity to support lending to the multifamily market.

Third, by helping ensure that capital is available to credit-worthy borrowers in all communities.

• The plan calls for greater transparency by requiring securitizers to disclose information on the credit, geographic, and demographic characteristics of the loans they package into securities. And the Administration will explore other measures to make sure that secondary market participants are providing capital to all communities in ways that reflect activity in the private market, consistent with their obligations of safety and soundness.

Lastly, by providing consistent, flexible, and transparent funding.

• Reliable funding for affordable housing was the goal of the National Housing Trust Fund created by Congress in 2008 – but it has never gotten off the ground. The Administration is committed to working with Congress on developing a new dedicated, budget-neutral, financing mechanism to support homeownership and rental housing.
While today we are talking about our report to reform our nation’s housing finance market – let’s be clear: this process started virtually the moment we took office.

At the FHA, we have implemented important changes and reforms over the last two years including strengthening underwriting standards, improving processes and operations, and raising prices that have significantly improved their financial condition.

Since Fannie Mae and Freddie Mac were placed into conservatorship, the FHFA has strengthened underwriting standards and adjusted pricing to better reflect risk as well. Key indicators show that the quality of loans they are making has improved substantially. As a result, the vast majority of the losses are from loans made prior to conservatorship.

Finally, the Dodd-Frank Wall Street Reform law provides vital protections for consumers and investors that will help end abusive practices in the mortgage market and improve the stability of the overall housing finance market.

But these measures are only first steps. That is why we need to work with Congress on a long-term solution that brings private capital back to pave the way toward the balanced national housing policy – that ensures Americans have rental options near good schools and good jobs, access to credit for those in a position for sustainable homeownership, assistance for those who feel the strain of high housing costs, and above all, choices in housing that make sense for them and for their families.

Bringing us closer to that goal is what our new report is about – and it’s why I was so pleased to be a part of making it possible.

10 Responses to Supporting Affordability and Accessibility Through Housing Finance Reform

  1. After seven attempts to get a loan modification it seem like white and black people are not getting loan modification from bank of america.I went to the sports arena NACA to get a loan modification(making home affordable program)while me and my wife was at NACA we saw other nationalities receive loan modifications on the spot I wish ehat you could investigate bank of amerrica because they are doing illegal foreclosures in Riverside County they were paid by Presidend Bush and President Obama,me and your texpayer money to help the homeowners,I have been waiting since February two thousand ten to get a loan modification and have been under so much trying to get a loan modification which has caused me to die five times in my sleep now i have sleep apnea and diabetion as a result of stress.I have wrote and complained to the CEO,of bank of america Mr.Biran Moynihan.Sincerely Freddie JacksonLoan number is 170421230

  2. Thank you for the opportunity to respond to you recent article:” Supporting Affordable and Accessibility Through Housing Finance Reform”.
    I am a homeowner, on a Social Security Disability, paying more than 70% of my monthly income on mortgage,insurance, taxes,and utilities. Food is a luxury that I cannot afford. Repairs are not even on my monthly list of expenses.
    My question is: Why do I not qualify for Section8 if firsttime homeowners can purchase a home and have it subsidized through this program?
    In your considerations for reform, could you consider allowing people like us, disabled, on a fixed income, and own a home, to include in your subsidy programs? We are falling through the cracks and I can only see homelessness in my near future. Either my income or the need for repairs will find me homeless.

  3. My husband and i are wanting to purchase a home for the first time. We only have 45 days to get this done. We need help with a down payment and closing costs and realter costs and who knows whatever else we’ll need $$ for ??? Anyways now that i have seen what $$ is needed to get into a home we should ” NEVER LET A VET GO HOMELESS in THIS COUNTRY! ” It seems like ” ALOT ” of money to me but it sure shouldn’t to this great COUNTRY of ours. HELP SUPPORT our TROOPS! while active or during war and or their lives after the military. Thanks Tammy

  4. HELLO,IM A SINGLE MOTHER OF THREE BABIES. I HAVE SOMETHING TO SHARE WITH YALL,I WAS LIVING IN THE BUEANA VISTA APARTMENTS IN ELGIN ILLINOIS. THERE WAS THIS LADY NAME HOLLY LUCY SHE WAS SUPPOSE TO BE A PROPERTY MANAGER. SHE DISLIKED ME BECAUSE A PERSON CALLED HER RESTRICTED AND TOLD HER I WAS TALKING BOUT HER SO SHE WAS TRYING TO FIND A WAY TO GET ME TERMINATED. SO, HER AND A YOUNG LADY NAME ALEXANDRIA DOUGLAS PLANED TO GET ME PUT OUT. SO I WAS IN SCHOOL TRYING TO BETTER MY CAREER AND I HAD NO HELP I NEEDED A BABYSITTER SO I HAD MY KIDS DAD TO COME AND WATCH THEM BECAUSE I HAD NO BABYSITTER SO THE YOUNG LADY KNEW THAT MY KIDS FATHER WAS AT MY HOUSE AND HE WAS SUPPOSE TO BE BARRED(KIDS DAD)SO SHE CALLED HOLLY LUCY AND LET HER KNOW HE WAS THERE AND SHE CAME TO MY APPARTMENT WITH A 10 DAY NOTICE. I WAS LOST FOR WORDS BECAUSE I DIDNT NO WHAT TO DO OR WHERE I WAS GONNA GO WITH MY BABIES SO WE WAS GOING TO COURT I DIDNT HAVE NO ONE, NO PUBLIC DEFENDER OR ANYTHING SO THEY HAD SOMEBODY TO REPRESENT THEM AND HE PRESSURED ME TO SIGN SOME PAPER SO THAT I CAN GET MORE TIME IN THE APARTMENT TO FIND ME SOMEWHERE TO GO BUT, COME TO FIND OUT LATER THAT THE PAPER I SIGNED WAS AN EVICTION ITS SAID THAT HOLLY HATED ME THAT BAD THAT SHE GOT ME EVICTED AND THEN AAFTER SHE GOT ME EVICTED SHE QUIT HER JOB CAN SOMEONE HELP ME….I HAD TO MOVE APRIL OF 2010 NOW ITS HARD TO GET ME AND MY BABIES AN APARTMENT AGAIN.

  5. These are positive steps to housing reform that can help stabilize the housing market over the long term. While home ownership can be good for some, renters are also equal contributors to our economy.

  6. Mr. Expert,

    Are you going to have a follow up post or article about this anytime soon? :)

    _______
    “Providing you with great tips on Copyright Law” …
    ( )

  7. It has to happen some time in order to draw private capital back into the mortgage market and eventually get back to somewhat normal supply and demand for mortgages.

  8. My question is: Why do I not qualify for Section8 if firsttime homeowners can purchase a home and have it subsidized through this program?
    In your considerations for reform, could you consider allowing people like us, disabled, on a fixed income, and own a home, to include in your subsidy programs? We are falling through the cracks and I can only see homelessness in my near future. Either my income or the need for repairs will find me homeless.
    My-Wanted, Parcourez le web en un click

Leave a Reply

Your email address will not be published. Required fields are marked *