Urge Your Senator to Pass Housing Finance Reform NOW!

There are only a dozen legislative days left before Congress adjourns for the November elections.  But there is still time to contact your U.S. Senators to urge them to support S. 1217, the Housing Finance Reform and Taxpayer Protection Act of 2014,and to ask Senate leadership to hold a vote on the bill.  The bipartisan housing finance reform bill would ensure that 30-year mortgages remain readily accessible and available, increase private capital in the marketplace and protect American taxpayers.

Call your U.S. Senators to urge them to SUPPORT S. 1217 and put pressure on Senate leaders to hold a vote on the bill.

Talking Points:

• I urge you to advance long-overdue housing finance reform legislation and pass S. 1217.

• A revitalized housing market, as envisioned by S. 1217, can serve as an engine of economic growth.

• With nationwide housing starts currently running 700,000 to 800,000 units below what is considered normal production, building an additional 200,000 single-family homes would create nearly 600,000 full-time jobs and generate $22.2 billion in federal, state and local tax revenues.

Contact Your Senator:

Background

• While Fannie Mae and Freddie Mac continue to operate under government control, serious reform discussions are underway in Congress on the future of the U.S. housing finance reform system.

• In the aftermath of the housing downturn, investors have been reluctant to invest in mortgage securities without government backing.

• While the House of Representatives is considering legislation to completely remove the government role in the conventional mortgage market, the Senate bill would preserve the federal support necessary for the proper functioning of the U.S. housing market.

• Home builders believes federal support is particularly important to the availability of an affordable 30-year fixed-rate mortgage, which has been a staple of the U.S. housing finance system since the 1930s.

• S. 1217, the Housing Finance Reform and Taxpayer Protection Act of 2014, S. 1217 sets in place a workable, stable framework for housing growth.  More specifically, the bill would:

• Wind down Fannie Mae and Freddie Mac within five years and ensures that a government backstop would only be triggered under extreme circumstances and after significant levels of private capital are first exhausted;
• Creates the Federal Mortgage Insurance Corporation (FMIC), which is modeled in part after the FDIC;
• Charges FMIC to maintain an insurance fund with a minimum reserve balance of 2.5 percent of the outstanding balance of covered securities as a catastrophic backstop that would only be utilized in the event that the 10 percent first-loss private capital is completely wiped out;
• Removes shareholders from the government utility, but renews competition and innovation by chartering market-capped, private risk-sharing institutions; and
• Ensure that community banks and credit unions have direct access to the secondary market and equitable pricing with larger originators.