Reps. John Carney (D-DE), John K. Delaney (D-MD) and Jim Himes (D-CT) first introduced the Partnership to Strengthen Homeownership Act last summer. The bill pares down the government-sponsored enterprises (GSE) for sale into the private market
The measure also offers insurance through Ginnie Mae, supporting all single-and-multi-family mortgage backed securities (MBS) with five percent private sector capital, which is in a first loss position. The 95 percent remaining risk will be divided between Ginnie and a private re-insurer, and fees paid to Ginnie will go toward affordable housing programs.
Noting this approach veers toward middle ground between private and public sector housing reform, Rep Carney says, “If we to want to preserve the dream of homeownership and make sure taxpayers aren’t on the hook for another bailout—the status quo has to change. Our bill is the right policy, and it’s also an approach that appeals to both sides of the aisle.“
Mortgage industry leaders have responded positively to this bill. Mortgage Bankers Association President and CEO David H. Stevens said, “We particularly appreciate the bill’s approach regarding the appropriate level of private ‘first-loss’ capital required, its mechanisms for the pricing of a federal guarantee, and its recognition of the unique attributes and importance of the multifamily finance market.“
Said John Dalton, president of the Financial Services Roundtable’s Housing Policy Council: “This bill shows there are thoughtful members on both sides of the aisle who recognize the need for change.“ ##
(Image credit: housingwire)
