Housing finance reform is likely to take a backseat as Washington D.C. adjusts to its latest members, leaving a lot of unanswered questions for housing ahead.
Former U.S. Representative Rick Lazio, R-N.Y., and President Obama’s former chief economic advisor Gene Sperling met together during the Urban Institute-CoreLogic housing finance symposium to discuss midterm politics, the state of the housing finance market, and the future of reform.
But regardless of the lack of urgency on housing reform, Sperling said, “Neither side should be happy with the [housing finance] status quo.”
The two explained that right now conservatives worry because taxpayers are currently responsible for potentially large losses in the housing market, a position antithetical to small government. Meanwhile, many, including liberals, worry that the “credit box” is too tight, making it overly difficult for low- and middle-income borrowers to get credit, and driving up both house purchase and rental prices.
However, this fails to make it into the public eye for the 2016 presidential election.
“It’s not a part of the conservative American consciousness that taxpayers are totally on the hook right now, and don’t need to be,” Lazio said.
Sperling expanded saying, “This is such a complicated issue and there’s so little clarity about what’s at stake that it’s unlikely that it’ll become a central issue.”
Recently, Federal Housing Finance Agency Director Met Watt and U.S. Secretary of Housing and Urban Development Julian Castro announced their plans to address some of the housing finance industry pain points in what Mortgage Bankers Association CEO David Stevens called "extremely positive" policy steps.
"We know that access to credit remains tight for many borrowers, and we are also working to address this issue in a responsible and thoughtful manner," Watt said. "Additionally, FHFA continues to evaluate ways to refine and improve the loss mitigation and foreclosure prevention policies at the Enterprises, because we understand that many individuals and families are still facing the possibility of foreclosure and are looking for alternatives to stay in their homes."