Page 28 - May-June 2018 GSE Report Flip Book

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for mortgage loans to qualified borrowers, while HUD would assume primary responsibility for affordable housing objectives by providing support to low- and moderate-income families that cannot be fulfilled through traditional underwriting and other housing assistance grants and subsidies. To effectuate this, the newly fully-privatized GSEs would have mandates focused on defining the appropriate lending markets served in order to level the playing field with the private sector and avoid unnecessary cross-subsidization. A separate fee on the outstanding volume of the MBS issued by guarantors would be used specifically for affordable housing purposes, and would be transferred through congressional appropriations to, and administered by, HUD.
• Provide more targeted assistance to those in need. The proposal would be designed so that the affordable housing fees transferred to HUD would enable FHA to provide more targeted subsidies to low- and moderate-income homebuyers while maintaining responsible and sustainable support for homeownership and wealth-building. Some
of the fees could potentially be used to support affordable multifamily housing or other HUD activities. All of this support would be on- budget and accountable. (Delivering Government Solutions in the 21st Century: Reform Plan and Reorganization Recommendations, Office of Management and Budget, June 2018)
“lt is long past time to end the failed model of private gains and public losses,” said Senator Bob Corkier (R-TN). “I agree with the administration that creating competition is a critical step as we work to shrink Fannie and Freddie and put an end to `too big to fail’ mortgage companies.”
The Housing Policy Council (HPC), led by Ed DeMarco, a former Acting Director of the FHFA, released the following statement regarding the OMB’s proposal to reorganize parts of the government:
“The Housing Policy Council is pleased that the Administration’s proposal for government reorganization released by OMB recognizes the need for housing finance reform. The country needs a modernized housing finance system with competitors for Fannie Mae and Freddie Mac, a market based on private capital, and a catastrophic government backstop for the secondary market that provides protection for the taxpayers and the economy. The Housing Policy Council supports action on the issue and is ready to work with the Administration and Congress on ending the failed GSE-based system that has resulted in decade-long conservatorships and toward a market-based
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