Many signs point to Congress moving housing finance reform forward in 2014. Whether that means passing an actual law (a rare feat these days) or drafting and negotiating what will eventually get passed in a future session remains to be seen. Either way, this year is a time for advocates to focus on the great unfinished work coming out of the housing crisis: fixing mortgage finance.The Senate Banking Committee continues to lead the way, and it will likely mark up a bipartisan bill in the first quarter. That effort got its start with the Corker-Warner bill, and the committee has been hard at work since gathering comments and revising the bill.
Prospects for constructive activity in the House are dimmer, and action in the House Financial Services Committee will likely focus on Chairman Jeb Hensarling’s (R-TX) PATH Act, an extreme proposal with little hope of broader support. It may take Senate and White House action to put a bipartisan bill on the House’s agenda.
Mel Watt was sworn in Monday as the new head of the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac. NHC is hopeful he will move regulation of the secondary mortgage market towards broader access to and affordability of housing even as Congress works its way through reform legislation.
One positive signal from the White House this week came from Gene Sperling, Director of President Obama’s National Economic Council, who put housing finance reform on the short list of issues with real momentum for action in 2014. Strong action from the White House could help to focus Congressional attention and move legislation forward.
All this means advocates should use 2014 to remind elected officials how important housing finance reform is to neighborhoods still recovering from waves of foreclosures and households struggling with high housing costs. As I said before the Senate Banking Committee last year, the work of rebuilding the mortgage finance system cannot be only about making markets function—it must be about shelter. As the federal government creates new mechanisms for housing finance, deploys its full faith and credit, and encourages private entities to put capital to work, the social purpose of safe, decent, and affordable housing for all in America must guide those efforts.