An August 15 Washington Post story covered the ongoing development of a mortgage finance reform proposal first given shape by the Obama Administration in its February white paper, which outlined three options for government’s role in mortgage markets. Those options ranged from an emergency-only government rescue capacity to an always-on government guarantee to sustain liquidity, stability, and broad affordability of home finance. The Post reports that the proposal under development would “keep the government playing a major role in the nation’s mortgage market.”
Naturally, the White House describes the Post’s reporting as “premature.” Which, of course, it is—that’s why it’s interesting to read now. The Post’s article also provides a useful thumbnail sketch of the mortgage finance policy development thus far, though it focuses on the Administration perspective to the exclusion of legislative activity. One example of a bipartisan proposal is the Miller-McCarthy proposal to nationalize Fannie and Freddie into a single credit facility. Another is the Campbell-Peters proposal (HR 1859) to create multiple private securitizers with a federal backstop.