In the midst of the National Republican Convention in Tampa, Florida last week, the Republican Party released its platform on several issues, including housing policy. Stressing free enterprise and the return of the private sector, the G.O.P. says the Federal Housing Administration needs paring down.
“The FHA, tripled in size to more than $1 trillion under the current Administration, has crowded out the private sector and is at risk of requiring a taxpayer bailout,” the platform document states. “It must be downsized and limited to helping first-time homebuyers and low- and moderate- income borrowers.”
Further, the statement references the use of settlement funds received by the FHA following the largest mortgage settlement in history, leaving lenders implicated in the national robo-signing scandal on the hook for a collective $25 billion. FHA received a windfall as part of the settlement, which officials stated helped in part to bolster FHA’s capital position in 2012.
“While the federal government must prosecute mortgage fraud and other financial crimes, any settlements received thereby should be directed to individuals harmed by the misconduct, not diverted to pay for unrelated programs,” the platform states.
The statements underly a strong endorsement for backing away from government housing support, although they are not nearly as strong as initial comments made by presidential hopeful Mitt Romney to do away with the Department of Housing and Urban Development entirely. Romney’s campaign later defended the comments by stating he was merely mentioning ideas, not specific policy measures.
The Republican stance today also includes the winding down of Fannie Mae and Freddie Mac in an effort to bring private mortgage lending back.
Written by Elizabeth Ecker
