Bradley in DC
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http://mckinleyforcongress.com/PressRelease_031808A.html
What Should Be Done About the Mortgage Market
March 18 , 2008
[email protected]
The mortgage market bubble has burst and in Washington efforts continue to find the right solution to falling real estate values that have brought on a weakening economy. The most common spin on the mortgage market has been that private markets have failed and now government intervention is needed to straighten everything out.
This focus on market failure has led to a number of proposals to make fundamental changes to the mortgage market. One such reform is the Mortgage Reform and Anti-Predatory Lending Act of 2007 which relies on increased federal involvement in the mortgage process. This legislation, championed by Chairman Barney Frank of the Committee on Financial Services, has passed the House and now awaits action in the Senate. The Bush Administration has come out strongly against it noting it would cause greater uncertainty and increased litigation which would worsen the current credit crunch.
The reality is that government meddling contributed to the housing bubble. Government policy since the early 1990s, whether it was the Clinton Administration with its “National Homeownership Strategy” or the Bush Administration, which largely continued these policies, has had its almost sole focus to boost homeownership rates. This focus has seemingly had little concern for whether homeowners could actually afford those homes.
As evidence of this push, homeownership rates (p. 4) were for most of the 1980s at a level of 64% to 65%. The increased aggressiveness of government programs of the Clinton and Bush years, such as the Federal Housing Administration, Housing and Urban Development, and Community Reinvestment Act, artificially pushed this rate up to 69% by 2004. With the collapse of the housing bubble this rate is now headed downward.
Congressman Wolf of the 10th District was the only member of the Republican House delegation in Virginia to vote for the Mortgage Reform Act. Vern McKinley, Congressman Wolf’s Republican primary challenger, has argued for a number of years that a wide range of government programs such as Fannie Mae and Freddie Mac and the Community Reinvestment Act have put too much emphasis on directing credit to the mortgage market. “The lack of demand for housing is likely to get worse in the years to come rather than better. Aging baby boomers will be selling their homes in future decades as they downsize or move out of homes. The mortgage market will need to retain its flexibility to absorb these continuing changes in demand,” McKinley concludes.
http://mckinleyforcongress.com/contribute.html
What Should Be Done About the Mortgage Market
March 18 , 2008
[email protected]
The mortgage market bubble has burst and in Washington efforts continue to find the right solution to falling real estate values that have brought on a weakening economy. The most common spin on the mortgage market has been that private markets have failed and now government intervention is needed to straighten everything out.
This focus on market failure has led to a number of proposals to make fundamental changes to the mortgage market. One such reform is the Mortgage Reform and Anti-Predatory Lending Act of 2007 which relies on increased federal involvement in the mortgage process. This legislation, championed by Chairman Barney Frank of the Committee on Financial Services, has passed the House and now awaits action in the Senate. The Bush Administration has come out strongly against it noting it would cause greater uncertainty and increased litigation which would worsen the current credit crunch.
The reality is that government meddling contributed to the housing bubble. Government policy since the early 1990s, whether it was the Clinton Administration with its “National Homeownership Strategy” or the Bush Administration, which largely continued these policies, has had its almost sole focus to boost homeownership rates. This focus has seemingly had little concern for whether homeowners could actually afford those homes.
As evidence of this push, homeownership rates (p. 4) were for most of the 1980s at a level of 64% to 65%. The increased aggressiveness of government programs of the Clinton and Bush years, such as the Federal Housing Administration, Housing and Urban Development, and Community Reinvestment Act, artificially pushed this rate up to 69% by 2004. With the collapse of the housing bubble this rate is now headed downward.
Congressman Wolf of the 10th District was the only member of the Republican House delegation in Virginia to vote for the Mortgage Reform Act. Vern McKinley, Congressman Wolf’s Republican primary challenger, has argued for a number of years that a wide range of government programs such as Fannie Mae and Freddie Mac and the Community Reinvestment Act have put too much emphasis on directing credit to the mortgage market. “The lack of demand for housing is likely to get worse in the years to come rather than better. Aging baby boomers will be selling their homes in future decades as they downsize or move out of homes. The mortgage market will need to retain its flexibility to absorb these continuing changes in demand,” McKinley concludes.
http://mckinleyforcongress.com/contribute.html
