Peters Statement on Bipartisan Senate Banking Committee Agreement on Housing Finance Reform
Washington – March 13, 2014 – (RealEstateRama) –Following the U.S. Senate Banking Committee announcement to review a bipartisan plan to overhaul the housing industry, U.S. Representative Gary Peters released the following statement:
“Affordable home ownership is a cornerstone of the American Dream, and Michigan middle class families, and those aspiring to get there, need to have confidence that the housing market is stable and that taxpayers are no longer on the hook for big bailouts. Today, Republicans and Democrats in Congress signaled that they are willing to work together to ensure that buying a home remains an attainable goal for American families. We must work together to reform the housing industry in a manner that strengthens our housing market recovery and preserves the availability of affordable 30-year-fixed mortgages for middle class families.”
Peters has fought to protect the 30-year fixed rate mortgage and responsibly wind down Fannie Mae and Freddie Mac. Peters offered an amendment that would have ensured the continued availability of affordable 30 year-fixed-rate mortgages for middle class families in the mark-up of Financial Services Committee Chairman Jeb Hensarling’s partisan GSE reform bill. While Peters’ amendment earned bipartisan support, it was not included into the bill.
In 2011, Peters worked with Republican Congressman John Campbell on a bipartisan plan to overhaul the federal mortgage system to prevent taxpayer funded bailouts and ensure access to affordable homeownership. The Wall Street Journal hailed their efforts, praising “the compromise proposed by Rep. John Campbell (R., Calif.) and Rep. Gary Peters (D.,Mich) may be the only plan likely to attract sufficient support from both parties…at a time when gridlock looms over issues such as how to curb federal spending.” In 2011, they introduced a plan to replace our current system, which allows GSEs to rack up massive profits while leaving taxpayers with all the risk, with privately capitalized entities authorized to purchase an explicit and limited guarantee covering the securities they issue. They proposed a new system that would be built on the concept of the Federal Deposit Insurance Corporation (FDIC) and would ensure that bedrock housing financial products like the 30-year fixed-rate mortgage remain accessible for qualifying households. In the 2011 proposal, securities issuers would be required to keep healthy capital reserves, which would stand in between taxpayers and potential losses, and would also pay into a privately-capitalized catastrophic reinsurance fund. The fund could only be tapped in after the issuer’s assets had been exhausted and would cover payment of principal and interest on mortgage-backed securities to investors only.
