Washington, D.C. – Former Senate Majority Leader George Mitchell, former Senator and HUD Secretary Mel Martinez, former HUD Secretary Henry Cisneros, and former Senator Christopher “Kit” Bond, co-chairs of the Bipartisan Policy Center’s (BPC) Housing Commission, released the following statement on the Housing Finance Reform and Taxpayer Protection Act of 2013.
“We commend Senators Corker and Warner for introducing this important bipartisan legislation. We are grateful for their hard work and thoughtfulness, and hope the introduction of their legislation signals a renewed focus in Congress to repair our nation’s broken system of housing finance.
“The stakes are high. As we approach the fifth anniversary of the government’s takeover of Fannie Mae and Freddie Mac, the government dominates the housing market in a way never seen before in our nation’s history. Today, the government touches more than 90 percent of mortgages. This government-dominated status quo is undesirable and unsustainable and exposes taxpayers to unnecessary risk. Recent developments such as rising home prices and the return to profitability by Fannie Mae and Freddie Mac should not lull us into a false sense of complacency.
“We are pleased that the Corker-Warner legislation incorporates many of the elements of the housing finance reform plan proposed earlier this year by the Bipartisan Policy Center’s Housing Commission. The BPC plan is the product of 16 months of collaboration among 21 citizens drawn from diverse political and professional backgrounds. Like our plan, a key objective of the legislation is to create a new system that encourages private capital to play a far greater role in bearing mortgage-credit risk. Like our plan, the legislation envisions a new system in which private entities are responsible for most of the mortgage system’s functions–not only as mortgage originators and servicers but also as issuers of mortgage-backed securities and credit enhancers. To ensure a smooth transition, the legislation also reflects the BPC approach of gradually winding down Fannie Mae and Freddie Mac over a multiyear period while a new system is adopted.
“The introduction of this legislation is proof that bipartisan cooperation is possible, even on an issue as complex as housing finance reform. We look forward to continuing to work with the bill’s sponsors, as well as with Chairman Johnson, Ranking Member Crapo, Chairman Hensarling, Ranking Member Waters and other legislators, to design a new housing finance architecture that more effectively meets the mortgage credit needs of America’s working families.”