Delaney, Carney, and Himes Statement on Johnson-Crapo Housing Reform Agreement
Washington, D.C.—Tuesday, Senate Banking Chairman Tim Johnson and Senator Mike Crapo, the committee’s ranking Republican, unveiled a bipartisan agreement on housing finance reform. The Johnson-Crapo plan would use Corker-Warner as its base architecture and wind down Fannie and Freddie.
Representatives John K. Delaney (MD-6), John Carney (DE-AL), and Jim Himes (CT-4) have developed housing finance reform legislation that uses private sector market forces to appropriately price risk while putting the scale and security of a government guarantee behind the program. They plan to introduce legislation to create a housing finance system that is fair for borrowers, lenders, and taxpayers.
Delaney, Carney, and Himes issue the following statement:
“We thank Senate Banking Chairman Johnson and Ranking Member Crapo for prioritizing housing finance reform, an issue of vital importance to the long-term health of our economy and financial system. We applaud their bipartisan approach and see their proposal as a positive development that shows significant momentum behind smart GSE reform. We also thank Senator Warner and Senator Corker for their enormous contribution to this process, their work has been instrumental in developing an initial bipartisan framework to build upon in the Senate.
“We share their core goals of both protecting taxpayers and ensuring the continued availability of the 30-year, fixed-rate, mortgage. America needs a housing finance system that is fair for borrowers, lenders, and taxpayers. We believe that the best course of action moving forward is a bipartisan, bicameral approach. We have introduced an innovative model that marries private sector pricing with the government’s ability to provide capacity. We are eager to work with our Senate colleagues as Johnson-Crapo goes through the legislative process.”
Key elements of Delaney-Carney-Himes Housing Finance Proposal
- Housing reform legislation allows the government to expand the capacity of housing finance while allowing the private sector to price the risk
- Creates incentives for private capital’s market share in housing to grow over time;
- Creates a path for Fannie Mae and Freddie Mac to be sold as independent companies without any government support or monopoly status
- Creates additional funds for low income housing
The Delaney-Carney-Himes housing finance proposal creates a structure that enables the government to significantly expand the availability of capital in the insurance market, while ensuring the mortgage market is open and efficient – with private capital participating in the market and pricing the risk. The plan adds discipline to the mortgage market, creates meaningful paths and incentives for private capital to flow into the mortgage market, and ensures that the mortgage market benefits from the liquidity provided by government participation.