Skip to main content

Sens. Corker and Warner Discuss GSE Replacement Plan
Sep 20, 2013

Earlier this week, Sens. Bob Corker (R-TN) and Mark R. Warner (D-VA) sat down with Zillow Chief Economist Dr. Stan Humphries to discuss their ideas of what the future of mortgage finance reform should look like in this country. Sens. Corker and Warner are co-sponsors of SB 1217, the Housing Reform and Taxpayer Protection Act of 2013. The Corker-Warner bill would replace government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac with a new system that aims to standardize mortgage securitization frameworks, strengthen taxpayer protections from future economic downturns and preserve market liquidity. In 2008, Fannie Mae and Freddie Mac were placed under government conservatorship after rising defaults and foreclosures caused them to become insolvent. The government injected more than $150 billion in taxpayer funds into the companies to keep them afloat and ensure mortgage liquidity during the housing recession. It was hoped the measure would be temporary, but five years later, Fannie and Freddie are still under government control. At the heart of the Corker-Warner plan is the creation of a new government entity, the Federal Mortgage Insurance Corporation (FMIC), that would replace Fannie Mae and Freddie Mac. The FMIC would provide a federal backstop for investors in certain mortgages, like the GSEs currently do, but that backstop would only be triggered after private investors had already absorbed the first 10 percent of any potential losses. During the discussion, Sens. Corker and Warner estimated this 10 percent risk retention would far exceed what would have been required even during the worst of the last housing recession, ensuring taxpayer funds going forward are only required in the most dire of circumstances. The new system also would separate many of the functions currently grouped together under Fannie and Freddie, including mortgage securitization, insurance and funding for affordable housing. Corker labeled the current system a “duopoly” and said it had become largely unmanageable. Warner said Fannie and Freddie had grown into a system that nobody envisioned at their outset. Corker and Warner said the fact that the bill already had bipartisan support, even in today’s politically polarized environment, was an indication of just how important this issue has become. Along with Sens. Corker and Warner, co-sponsors of the bill include Sens. Mike Johanns (R-NE), Jon Tester (D-MT), Dean Heller (R-NV), Heidi Heitkamp (D-ND), Jerry Moran (R-KS), Kay Hagan (D-NC), Mark Kirk (R-IL), Joe Manchin (D-WV) and Saxby Chambliss (R-GA). This discussion comes at a time of growing sentiment that keeping Fannie Mae and Freddie Mac as they are and returning to the pre-crisis status quo is increasingly unacceptable. The Corker-Warner plan is one of a handful of plans raised in recent months, including a bill introduced in the House of Representatives by House Financial Services Committee Chairman Jeb Hensarling, R-TX. Hensarling’s plan would also abolish Fannie Mae and Freddie Mac, and replace them with a fully privatized mortgage finance system. “Now is the time to be talking GSE reform,” Humphries said. “The housing market recovery is moving forward on its own two feet, and we need to move past the temporary fixes that were put in place during the crisis and create a functional and sustainable mortgage finance system. It’s now a matter of figuring out how and when to make those changes.”
Sep 20, 2013
Crime Stories From The Trenches

Bad brokers, renegade Realtors, treacherous title agents. It’s getting tough out there.

Regulation and Compliance
Oct 26, 2021
Feds Reviewing Appraisal Standards, Qualifications

Appraisal Subcommittee said requirements are being reviewed to determine whether they ensure and promote fairness, equity, objectivity, and diversity, in both appraisals and in the training and credentialing of appraisers.

Regulation and Compliance
Oct 20, 2021
​​​​​​​FHFA OK's Desktop Appraisals, Expands Refi Criteria

The Federal Housing Finance Agency (FHFA) said Monday it will take two steps to help make home ownership more affordable and sustainable for mortgage borrowers, especially for those in underserved communities. 

Regulation and Compliance
Oct 19, 2021
CFPB Names 4 To Key Senior Positions

The appointees include two who helped create the bureau and two who served on the CFPB staff during the Obama administration.

Regulation and Compliance
Oct 14, 2021
FHFA Raises Enterprises' Multifamily Loan Purchase Caps

The Federal Housing Finance Agency (FHFA) said the 2022 multifamily loan purchase caps will be $78 billion for each Enterprise, for a combined total of $156 billion to support the multifamily market.

Regulation and Compliance
Oct 13, 2021
CFPB Hits AAG With Complaint For Deceptive Marketing Of Reverse Mortgages

The Consumer Financial Protection Bureau filed a complaint and proposed consent order, which alleges that American Advisors Group (AAG) used inflated and deceptive home estimates to attract reverse mortgage consumers.

Regulation and Compliance
Oct 12, 2021