Without needing action from Congress, the plan lays out a path for utility regulation of Fannie and Freddie and for dedicating nearly $100 billion toward addressing the country’s housing needs
WASHINGTON, D.C. – Today, the Brookings Institution published a new report by Mike Calhoun, President at the Center for Responsible Lending (CRL), and Lewis Ranieri, Chairman and CEO of Raneiri Solutions LLC, that proposes administrative reforms of Fannie Mae and Freddie Mac (the government-sponsored enterprises, or GSEs) that would greatly advance racial and economic justice. The report, Government-sponsored enterprises at the crossroads, and a blog post on it can be read on Brookings’s website.
The GSEs provide financial backing to around half of all U.S. mortgages. They are regulated by and in the conservatorship of the Federal Housing Finance Agency (FHFA).
From the report:
More than a dozen years after the government-sponsored enterprises (GSEs) were rescued and placed into conservatorship their future operation is still being determined. The government’s assistance to the GSEs and their subsequent return to profitability have created up to $100 billion of value held by the U.S. Treasury. That money should be used to make an historic investment in addressing the affordable housing crisis and advancing racial equity in housing. In addition, the GSEs should operate as utilities to best serve these goals as well as their overall mission to support the financing of the nation’s housing...
In particular, the government’s stock interests in the GSEs should be exchanged for a comparable commitment by the GSEs of additional affordable housing measures and a restorative justice housing program that provides targeted down payment and other assistance aimed at closing the racial homeownership gap.
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