Remember when the mortgage loan industry almost brought down the global economy? Virginia Senator Mark Warner says we haven’t fully recovered from that, and he’s working to make long-term change.
Virginia Senator Mark Warner says the housing market is patched together with Band-Aids and bailouts. And, he says, all that federal money that went to Fannie Mae and Freddie Mac to help homebuyers finance purchases is still on the line.
“Fannie and Freddie without reform would still be out there where the shareholders would do well when the economy is doing well but the taxpayers would still be exposed to this potentially hundreds of billions of dollars of loss if we had another crisis."
Frank Shafroth at George Mason University says it’s a mistake to return the housing market to what it was before. But, he says, the government can’t continue to own such a large portion of the market.
“When we put Humpty Dumpty back together again, we really need a bipartisan thoughtful effort by the Congress. This is not something that should be done by an administration without input and significant policy thinking by the Congress."
Warner has already joined forces with Republican Senator Bob Corker of Tennessee to draft the Housing Reform and Taxpayer Protection Act. But, he says, he doesn’t expect the lame duck Congress to take it up. That means that it’s likely to be a big issue early in the next administration.