Waiting On Congress To Reform Fannie Mae And Freddie Mac Is Unrealistic; White House Must Act

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Civil Rights And Housing Advocates: Waiting On Congress To Reform Fannie Mae And Freddie Mac Is Unrealistic; White House Must Act by CivilRights.org

Coalition outlined how the uncertain future of the GSE’s endangers long-term access to affordable housing for low-income and communities of color

WASHINGTON — The Leadership Conference on Civil and Human Rights (The Leadership Conference), joined by the Center for Responsible Lending (CRL), the National Community Reinvestment Coalition (NCRC), and the Labor Council for Latin American Advancement (LCLAA), called on the White House to take administrative action to address economic and racial disparities in the housing market. On a press call this afternoon, representatives from each organization outlined the steps the Obama administration should take to improve the current state of the housing finance system for minority communities, including restructuring Fannie Mae and Freddie Mac and allowing them to rebuild capital.

“Officials in the Obama Administration have flatly rejected the idea of letting Fannie Mae and Freddie Mac regain their financial stability, and have said that it is up to Congress to come up with a new system,” said Wade Henderson, President and CEO of The Leadership Conference. “Which Congress are they talking about? The House just pushed out its last Speaker because he wasn’t eager enough to shut down the federal government, and it hasn’t shown it can handle any other complex policy issue – especially one that ought to be bipartisan. Putting the future of our nation’s housing finance system in the hands of this House, while refusing to do what can be done under existing law, shows a level of naiveté and a seeming indifference to the consequences of the status quo that is truly disturbing.”

“Latinos cannot continue to be left out of wealth building opportunities like homeownership,” said Hector Sanchez, LCLAA Executive Director. “The economic implications of having a majority of Latinos, which will make up a third of the country by 2050, spending more than half of their income in the rental market will have serious effects on our nation’s economy.  We must encourage wealth building for Latinos because they will continue to play a key economic role in the future.”

“Our dog in this housing finance reform fight is the preservation of the Duties to Serve – the affirmative obligations in the charters and affordable housing goals of Fannie Mae and Freddie Mac that help to ensure that all creditworthy borrowers, including those in underserved communities, have access to responsible mortgage credit.” said Gerron Levi, NCRC Director of Policy and Government Affairs. “Because of the policy and political uncertainty ahead, we believe that only way to preserve the affordable housing goals is for the Obama administration to recapitalize the GSEs, end the conservatorship, and to continue building on the reforms of strong supervision and oversight enacted as part of the Housing and Economic Recovery Act of 2008.”

“The GSEs of today are far different from those that operated prior to the 2008 housing crisis,” said Mike Calhoun, CRL President.  “We have already made major reforms to make them safer and more effective. We need to continue that process and support the housing market and the entire economy, by strengthening broad access to all sustainable homebuyers and all responsible lenders, improving fair lending, and properly structuring and incentivizing the GSEs.”

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