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  • Comment Detail

  • Date: 12/23/14
    First Name: Matt
    Last Name: Hill
    Organization: N/A
    City: N/A
    State: N/A
    Attachment: N/A
    Number: RIN-2590-AA73

  • Comment

    Here's the deal, housing finance is not an inventive technology. It's not really something that the free market can engineer to come up with a ground breaking invention that leapfrogs the competitors and brings citizens into a newly efficient state. It's the age old loan and repayment of loan with interest.

    With that being said, here would be my utopian vision for housing finance. Every US homeowner and renter becomes a member of a credit union type of agency. This agency is run as a long term, not for profit agency. Here are some goals of the agency:
    - Provide lowest mortgage rates possible to support operations
    - Mortgage interest goes into reserves to guard against future housing crisis
    - Landlords can register to be associated with this agency
    - If landlords stick to certain rent suggestions for the area and stay certified, they will get TBD perks
    - Since homeowners will be getting lowest rate possible, a small portion of their payment will fund low income housing and rentals
    - At risk homeowners with lower down payments will have to contribute a little bit more
    - + many more details to be panned out with ideas similar to above

    This process ensures that all Americans get the lowest possible mortgage/rent payment. The agency will be able to build reserves for times of need. When the reserves are full, rates can be reduced and more assistance to the low income can be allotted. I believe America can set itself apart from other countries by supporting the largest purchase any citizen will ever take on. I think Americans would much rather support a utility type of model like this, then to line the pockets of bankers and still end up being on the hook for housing crisis. I can go on and on about the arguments for this, but I will stop there.

    In reality, the above would never happen as too many people would claim it is a form of socialism and a dangerous precedent would be set.

    In the absence of the full utility agency above, I do believe Fannie Mae and Freddie Mac are the closest private market entity to it and you are taking the correct steps to fund low income housing and rentals with the Housing Trust Fund.

    The next step needs to be releasing Fannie Mae and Freddie Mac to allow them to build capital to support this and other initiatives. Winding down Fannie and Freddie would be contradictory to this initiative of helping low income citizens. The only agencies proven to be able to take on the roles needed to support a healthy housing market are the GSEs. Please do not delay the next responsible step in this process.