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FEDERALhearing transcript

High Impact

Senate Hearing on Housing Finance Reform

Original title: PRINCIPLES OF HOUSING FINANCE REFORM

January 1, 2017

housing finance mortgages Fannie Mae Freddie Mac financial regulation taxpayer risk

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The Frame

What this does

The committee is exploring ways to restructure the government's role in the mortgage market, which currently backs approximately 70 percent of all mortgages, to prevent future taxpayer bailouts of Fannie Mae and Freddie Mac.

Who is mentioned in the record

Potentially affected actors named in the source documents. Mention is not a position.

Taxpayers

Taxpayers are currently exposed to financial risk through the government's backing of Fannie Mae and Freddie Mac.

Small Lenders

The committee is evaluating policies to ensure these lenders maintain a level playing field in the secondary mortgage market.

Homeowners

Proposed reforms aim to maintain the availability of 30-year fixed-rate mortgages.

What changed

Last recorded activity January 1, 2017.

What's next

Next step not available in the current record.

Summary

The Senate Committee on Banking, Housing, and Urban Affairs held a hearing to discuss potential reforms to the U.S. housing finance system. The discussion focused on reducing taxpayer risk associated with Fannie Mae and Freddie Mac while maintaining access to 30-year fixed-rate mortgages.

Key Facts

Fannie Mae and Freddie Mac have been in government conservatorship since September 2008.
Approximately 70 percent of all mortgages in the U.S. are currently backed by the federal government.
The Federal Reserve is the largest buyer of mortgage-backed securities.
Chairman Crapo identified the preservation of the 30-year fixed-rate mortgage as a key reform principle.
Proposed reforms include requiring private capital buffers for mortgage guarantors comparable to those held by global systemically important banks.
The committee aims to ensure small lenders have equal access to the secondary mortgage market.
Existing multifamily programs at Fannie and Freddie are proposed to be preserved in future systems due to their performance during the 2008 crisis.

Why It Matters

Frequently Asked Questions

Why are Fannie Mae and Freddie Mac being discussed?

They have been in government since 2008, and lawmakers are concerned that a future housing market downturn could force taxpayers to cover significant losses.

Will this change my current mortgage?

The hearing focused on long-term structural reform of the housing finance system; there is no immediate change to existing mortgage terms or availability mentioned.

News Coverage

No news coverage found yet. Articles are indexed twice daily.

Discoveries

Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.

policy shift90% confidence

Shift toward private capital

The committee is explicitly moving toward a model that requires private entities to hold capital buffers similar to major banks to reduce government exposure.

Fannie Mae Freddie Mac

Connected Entities

organizationFreddie Mac“Government-sponsored enterprise currently in conservatorship”Map →

organizationFannie Mae“Government-sponsored enterprise currently in conservatorship”Map →

personMichael D. Calhoun“President of Center for Responsible Lending”Map →

personEdward J. DeMarco“President of Housing Policy Council”Map →

personMike Crapo“Chairman of the Senate Committee on Banking, Housing, and Urban Affairs”Map →

personDavid H. Stevens“CEO of Mortgage Bankers Association”Map →

Sources

Open source document

www.govinfo.gov

Analysis Score

0–100

Significance85
How much this matters to a regular citizen
Controversy40
Intensity of disagreement among stakeholders
Entertainment10
Compellingness for a non-policy-wonk reader
Buzz20
Current news / social attention level

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