Real Estate

Republicans vs. Democrats: what each party says about housing finance reform

Still not much insight from individual candidates

Neither Donald Trump, the Republican nominee for president, nor Hillary Clinton, the Democratic nominee, have said much about housing. In fact, Trump has yet to give many specifics on it at all, despite polls from voters saying housing is an important issue for them.

About 76% of Americans who are likely to vote in the 2016 presidential election say they are more likely to support candidates who make housing affordability a focus of their campaigns and a priority in government, according to a national public opinion poll by Make Room, a nationwide campaign giving voice to American renters.

Trump has yet to offer a position on housing finance reform, and Clinton, while offering positions on housing policy, offered nothing on housing finance reform, according to an article by Eric Klopfer for MGIC Connects.

Given those circumstances, voters are forced to look at the party platforms in order to get a sense of their candidate’s likely position.

The article details five thoughts from Republicans on housing policy, found in the 66 pages of the Republican Platform 2016.

From the article:

1. The concept of “responsible homeownership” seems consistent with much of the Dodd-Frank Act efforts to create prudential standards for mortgage underwriting, but Republican antipathy to Dodd-Frank has led to an alternative approach centered around lender-initiated efforts and borrower behavior, rather than what the Consumer Financial Protection Bureau (CFPB) dictates.

2. The platform acknowledges supply-side constraints as well, and includes recommendations to reduce restrictions that limit the ability of new construction to keep up with demand.

3. The platform expresses frustration with the lengthy conservatorship of Fannie Mae and Freddie Mac, but encourages the examination of their roles, marking a change from prior Republican calls to wind down the entities.

4. The platform criticizes the Federal Housing Administration (FHA) for operating outside of its mission footprint and losing money, and recommends income limits on FHA activities.

5. Finally, the platform mentions (but does not discuss) renting, within the context of eliminating restrictions to promote greater supply of rental opportunities.

Similarly, the article outlined highlights from the 2016 Democratic Party Platform,  which had only two emphases.

From the article:

1. The platform defends the post-crisis policy framework created by Dodd-Frank, and commits to resisting any rollback of related legislative or regulatory provisions.

2. The platform acknowledges the continuing struggles of homeowners and renters harmed by the housing bust, and commits to expanding access to affordable housing and homeownership.

If the Republican Party sweeps November’s elections, the world of housing finance could be in for some significant changes, as the 2016 Republican Party platform calls for seriously cutting the government’s role in housing, potentially abolishing the Consumer Financial Protection Bureau and ending the use of disparate impact to enforce fair lending laws. Read more about the platforms planned changes here

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