Proposed Housing Bill Would Create a Co-Op of Mortgage Lenders
Rep. Maxine Waters (D-Calif.) believes the housing finance system should act more like a public utility. She plans to introduce a reform bill that would create a co-op of lenders that would be the sole issuer of mortgage-backed securities insured by the government. Private backers would be required to take the first 5 percent loss before the government guarantee takes effect. Karen Shaw Petrou, managing partner at Federal Financial Analytics, says whether enough entities will provide private-sector capital is a concern. "A utility, or co-op, may solve for that because it creates a special purpose entity that doesn't need to meet shareholder demand the same way a big bank or bondholder does," she explains. The proposal would establish a new federal regulator. A minimum down payment of 3.5 percent would be expected from a first-time buyer and 5 percent from everyone else, although the regulator would have the authority to lower those requirements.
From "Proposed Housing Bill Would Create a Co-Op of Mortgage Lenders"
New York Times (03/27/14) P. B3 Dewan, Shaila
Rep. Maxine Waters (D-Calif.) believes the housing finance system should act more like a public utility. She plans to introduce a reform bill that would create a co-op of lenders that would be the sole issuer of mortgage-backed securities insured by the government. Private backers would be required to take the first 5 percent loss before the government guarantee takes effect. Karen Shaw Petrou, managing partner at Federal Financial Analytics, says whether enough entities will provide private-sector capital is a concern. "A utility, or co-op, may solve for that because it creates a special purpose entity that doesn't need to meet shareholder demand the same way a big bank or bondholder does," she explains. The proposal would establish a new federal regulator. A minimum down payment of 3.5 percent would be expected from a first-time buyer and 5 percent from everyone else, although the regulator would have the authority to lower those requirements.
From "Proposed Housing Bill Would Create a Co-Op of Mortgage Lenders"
New York Times (03/27/14) P. B3 Dewan, Shaila
No comments:
Post a Comment