- Obama Administration Announces Conference on the Future of Housing Finance
- August 12, 2010
- Law Firm: Alston Bird LLP - Atlanta Office
Today, the Obama Administration issued a press release announcing a conference on August 17, 2010 to discuss the future of U.S. housing finance. Said Treasury Secretary Timothy Geithner, “The Obama Administration is committed to delivering a comprehensive reform proposal that protects taxpayers, institutes tough oversight, restores the long-term health of our housing market, and strengthens our nation's economic recovery.”
The President and Mr. Geithner received criticism for not addressing the reform of Fannie Mae and Freddie Mac in the Dodd-Frank Wall Street Reform and Consumer Protection Act which the President signed into law last week in the wake of opinions among Republican lawmakers that the provision was incomplete without specific plans for the two mortgage giants. Administration officials previously expressed concerns that concrete proposals could create panic in vulnerable areas of the marketplace, but now intend to deliver detailed measures to Congress by January 2011.
In a separate statement, Under Secretary for Domestic Finance Jeffrey A. Goldstein said that the restructuring of the housing system will span a complex of government entities and programs, including the Federal Housing Administration, Ginnie Mae and the Federal Home Loan Banks. Proposals will also involve a “significant private sector role” in the “responsible reform” of Fannie Mae and Freddie Mac, which will likely lead to dramatic changes in the government’s role in originating, purchasing, and servicing of mortgages. Said Mr. Goldstein, “For decades, Fannie Mae and Freddie Mac privatized their profits while ultimately putting taxpayer money at risk for losses. This type of ‘heads private shareholders win, tails taxpayers lose’ system of misaligned incentives makes no sense for the nation.”
Administration officials reaffirmed the President’s commitment to “engaging stakeholders and the public” as reform proposals are developed. In April 2010, Treasury and HUD issued a set of questions for public comment on the reform of the housing finance system, which received more than 300 responses. The upcoming conference is intended to expand public participation by bringing together a “broad cross-section of stakeholders”, including market participants, industry groups, academic experts and consumer organizations in ongoing discussions.