WASHINGTON (July 7, 2011) - The long-term viability of America’s housing finance market requires comprehensive reform of the secondary mortgage market. Toward that end, the National Association of Realtors® supports H.R. 2413, the “Secondary Market Facility for Residential Mortgage Act of 2011.”
“As the leading advocate for home ownership and housing issues, Realtors® want a secondary mortgage market that will serve home owners today and in the future, as well as support a strong housing market and economic recovery,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “An efficient and affordable restructured mortgage finance system is in the best interest of taxpayers, and to accomplish that, Congress must enact comprehensive housing finance reform legislation.”
H.R. 2413 was introduced yesterday by Reps. Gary Miller (R-Calif.) and Carolyn McCarthy (D-N.Y.). The bill offers a comprehensive strategy for reforming the secondary mortgage market and gives the federal government a continued role to ensure a consistent flow of mortgage credit in all markets and all economic conditions.
While the return of private lenders is necessary for a healthy market, having only private capital as the sole source of housing finance could severely restrict mortgage capital and result in a system that is dominated by a few large banks that are “too-big-to-fail” at the expense of consumers.
"We strongly support the efforts of Reps. Miller and McCarthy in developing a well thought-out strategy for reforming the secondary mortgage market. Continuing government participation and establishing an entity that will provide liquidity during all market conditions will help ensure that qualified home buyers can obtain safe and sound mortgage financing products even during market downturns, when private entities have historically pulled back,” Phipps said.
The entity would have no shareholders and would exclusively serve a national mission to facilitate the flow of mortgage capital and provide liquidity during all market conditions. The proposal also spells out plans to protect taxpayers and ensure safety and soundness through appropriate regulation and underwriting standards.
“We applaud the efforts of Reps. Miller and McCarthy to create a structure that opens the door to lenders of all sizes without favoring large lenders over small and mid-sized institutions,” said Phipps. “Other hybrid proposals with private profits and government guarantees would only replicate the same incentive structure and mistakes of Fannie Mae and Freddie Mac before the government takeover.”
NAR has and will continue to advocate comprehensive housing finance policies that will ensure qualified borrows can obtain safe and sound mortgage finance products rather than piecemeal approaches that would introduce uncertainty into the housing finance market and slow the fragile housing recovery.
“Realtors® thank Reps. Miller and McCarthy for their dedication and work on this bill, and we look forward to working with Congress to ensure that comprehensive and effective housing finance reform legislation is enacted. We must do this to preserve and strengthen the American dream for future generations,” Phipps said.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.
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REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS®. All REALTORS® are members of NAR.