By Rachel Goldfarb, originally published on Next New Deal
Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.
Set the Wayback Machine for Housing Finance Reform, But to When? (CLS Blue Sky Blog)
Roosevelt Institute Senior Fellow Brad Miller lays out the history of Fannie Mae and Freddie Mac to argue for a stronger government role in creating a safe and affordable mortgage market.
The lesson of experience, therefore, is that for the vast majority of Americans, the housing finance system was a spectacular success when dominated by government agencies acting for the public good and a catastrophic failure when dominated by Wall Street in pursuit of profit. Republicans and Democrats alike, however, now favor “reform” to reduce the role of government and “bring back private capital” to the private-label securitization market. Many proposals would hand Fannie’s and Freddie’s profitable business to Wall Street along with cheap government reinsurance against catastrophic losses, and do little to support affordable housing.In short, many proposals for housing finance set the Wayback Machine to 2005. For Wall Street banks, it would be a return to the glory days of housing finance, only with less competition and even more taxpayer subsidies.
Those days were not so glorious for homeowners and investors, however.
Follow below the fold for more.