According to some, there are many issues with the U.S. government, but housing policy ranks highest. A new report published by ""the Opportunity Agenda"":http://opportunityagenda.org, ""National Fair Housing Alliance"":http://www.nationalfairhousing.org, and the ""National Association of Real Estate Brokers"":http://www.nareb.com (NAREB) claims that the U.S. housing policy is broken, denying millions of would-be homeowners the credit and financing they need to achieve the American Dream. This broken system can be repaired with immediate executive and administrative action in Washington, D.C., sidestepping a glacially slow and highly partisan Congress, according to the authors of the study.[IMAGE]
The report includes ten administrative actions that the ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA) should take. These actions would require no legislative support and still achieve housing finance reform, according to the organization.
""Credit worthy American families, currently barred from the conventional market unnecessarily, should not be forced to wait for a legislative process that could take years,"" said Jim Carr, author of the policy report and fellow at the Opportunity Agenda, a national organization that works to expand opportunity in housing and homeownership.
An in-depth look at the new roles of the GSEs should also be a key focus of the government as the recovery continues. According to the report, the elimination of ""Fannie Mae"":http://www.fanniemae.com and ""Freddie Mac"":http://www.freddiemac.com is at the core of almost every major proposal aimed at revamping the mortgage finance system. Yet, housing finance reform that requires the wholesale replacement of the government-sponsored enterprises (GSEs), will take many years to approve and to establish. The report suggests a five-year time horizon is a reasonable estimate even under the best circumstances.
""The recent news that Freddie Mac will repay the government next month more than it received in bailout funds drives home the point that the need for FHFA as a conservator is over. Both Fannie Mae and Freddie Mac are generating huge earnings and FHFA's primary role now should be to rebuild the housing finance market,"" Carr said.
What sustainable recovery boils down to is for a concerted effort from regulators to enforce the fair housing laws.
""We do not need legislative action for regulators to effectively enforce the nations' fair housing laws or expand[COLUMN_BREAK]
access to credit for qualified borrowers,"" said Lisa Rice, VP of the National Fair Housing Alliance. ""If the GSEs were allowed to effectively serve all borrowers who are willing and more than able to pay their mortgage obligations, our economy would be improving at a greater pace.""
""It is clear that we cannot maintain the status quo. This report contains significant steps that can be taken now to change the status quo and help improve our economy,"" she said.
Among the report's suggested administrative actions are providing a liquid and reliable source of credit for housing in all geographies, including urban, suburban, and rural locations, to all credit-worthy borrowers. Equally important goals include ensuring that the nation's fair housing and equal credit opportunity laws are strictly followed and that adequate reserves are set aside to protect taxpayers from future bailouts.
""Conventional home lending for people of color has collapsed since the onset of the housing crisis. The result is a near credit shutdown making it more than difficult for African American and Latino borrowers to obtain mortgage financing,"" said Donnell Spivey, president of NAREB, a real estate trade association focused on fairness in all aspects of sustainable homeownership for African Americans, in particular, and other minorities, in general.
""The time for thinking about and debating housing finance reform is over. Now is the time to take every action possible to open the housing finance market for all Americans, not just a few,"" Spivey added.
""Our nation's housing crisis severely deteriorated the wealth of Latino families as well as devastated many of the neighborhoods they live in, and five years later, many of these families are still waiting for mortgage relief,"" said Enrique Lopezlira, senior policy advisor at ""National Council of La Raza"":http://www.nclr.org (NCLR). ""However, through administrative actions these families can get the relief they need and deserve. Creditworthy Latinos and other communities of color should not have to wait for new legislation to make sure they have access to mortgage credit.""
Earlier this month, partisan opponents in the Senate blocked the nomination of Rep. Mel Watt to become the new head of the Federal Housing Finance Agency (FHFA), which regulates the government-backed mortgage finance firms and has broad power to make meaningful policy changes. At the moment, the acting head of FHFA is Ed DeMarco, and Watt supporters say DeMarco continues to pursue a range of policies that are neither in the best interest of homeowners nor the housing market, including refusal to permit principal adjustments to loans backed by Fannie Mae and Freddie Mac, rigid underwriting requirements, and unnecessarily high guarantee fees.
""The confirmation of Mel Watt as Director of the FHFA would represent a major step toward establishing the administrative foundation to reform the housing finance system. That action should occur now,"" Carr concluded.